Operating Rules - Texas Health and Human ServicesTANF Cash Withdrawal Fees 32 10.3.3. Reimbursement...

Updated: 8/14/

Operating Rules

Version 7.0

Lone Star Operating Rules

Table of Contents Page Version 7.0 May 2017

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Table of Contents

1. General Participation Requirements and Standards ... 1

1.1. Introduction 1

1.2. Operation of the Texas EBT Program 1

1.3. Participation in the Texas EBT Program 1 1.3.1. Lone Star Cards 1 1.3.2. General Retailer Eligibility 1 1.3.3. Non-SNAP Retailer Eligibility 1 1.3.4. TANF Cash Participation 2 1.3.5. Participation Agreements 2

1.4. Participation Standards 3 1.4.1. Operations in Conformance with Regulatory

Standards 3 1.4.2. Maintenance of Records 3 1.4.3. Cooperation in Error Resolution 3 1.4.4. Examinations 3 1.4.5. Remedial Action 3

1.5. Lone Star Card Standards 3 1.5.1. Encoding and Embossing 3 1.5.2. Restriction on Use 3 1.5.3. PIN 3 1.5.4. Electronic Funds Transfer Capability 4

1.6. Non-Discrimination 4

1.7. Confidentiality of Client Information 4

2. Common Retailer Requirements ................................... 5

2.1. Introduction 5

2.2. Honor All Cards 5

2.3. No Discrimination 5

2.4. POS Terminals and Calls 5 2.4.1. Terminals 5 2.4.2. No Lane Restrictions 5 2.4.3. Calls 5

2.5. Lone Star Service Mark 5 2.5.1. Display at Point of Sale 5 2.5.2. Other Use of Lone Star Mark 5

2.6. TANF "Cash Back" Charges; SNAP Charges;

Sufficient Cash 5

2.7. Online POS Services Requirements 6 2.7.1. Requirement for Online Authorization 6 2.7.2. Entry of Primary Account Number (PAN) 6 2.7.3. Enforcement of PIN Usage 6 2.7.4. No Possession of PIN 6

2.8. No Card Retention 6

2.9. Training 6

2.10. Provisions Regarding Liability 7 2.10.1. General 7 2.10.2. Retailer Liability Limitations 7 2.10.3. PAN Entry 7 2.10.4. Manual Voucher Transactions 7 2.10.5. Electronic Voucher Settlement 8

2.11. Stand-In Processing 8

2.12. Additional Retailer Provisions 8 2.12.1. Miscellaneous Obligations 8

3. Requirements for State-Supported Retailers .............. 10

3.1. Introduction 10

3.2. Standard POS Terminal Equipment 10 3.2.1. Terminal Allocation 10 3.2.2. SNAP Participation 10 3.2.3. Equipment Provision 10 3.2.4. Minimum Redemptions 10 3.2.5. Terminal Installation 11 3.2.6. Restricted Use of EBT Terminals 11 3.2.7. Instructions and Assistance 11 3.2.8. Equipment Repairs 11 3.2.9. Ownership of Equipment 11 3.2.10. Right of Inspection 12 3.2.11. Protection of Equipment 12 3.2.12. NO WARRANTY AS TO EQUIPMENT 12 3.2.13. Removal of Equipment During Term of

Agreement 12

3.3. Limitation of Liability for Equipment 12

3.4 Offline Manual Voucher Transactions 13 3.4.1. Offline Transaction Capability 13 3.4.2. Manual Voucher Settlement Submission Rules13 3.4.3. Manual Voucher Use Requirements 13 3.4.4. Limits on Vouchers 13 3.4.5. Voucher Contents 13 3.4.6. Voucher Authorization 14 3.4.7. Client Copy 14 3.4.8. Voucher Submission 14 3.4.9. Standing Orders 14 3.4.10. Re-presentation 14 3.4.11. State Liability 14 3.4.12. EBT Provider’s Liability 14 3.4.13. Additional Procedures 15 3.4.14. Dispute Resolution 15 3.4.15. Electronic Submission of Manual Vouchers 15 3.4.16. Processing Rules for Electronic Submission of

Manual Vouchers 15

4. Requirements for Non-State-Supported Retailers...... 16



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4.2. POS Terminal Equipment 16 4.2.1. Unique Terminal ID 16 4.2.2. Keyboard 16 4.2.3. Magnetic Stripe Reader 16 4.2.4. PIN Functionality 16 4.2.5. PIN Security Implementation 16 4.2.6. Receipt Printer 16

4.3. Retailer Interface System 16 4.3.1. Requirement to Operate 16 4.3.2. Performance Requirements 17

4.4. Responsibility for Processing Compliance 17

4.5. Liquidated Damages ("LDs") 17

4.6 Offline Manual Voucher Transactions 18 4.6.1. Offline Transaction Capability 18 4.6.2. Manual Voucher Settlement Submission Rules18 4.6.3. Manual Voucher Use Requirements 18 4.6.4. Limits on Vouchers 18 4.6.5. Voucher Contents 18 4.6.6. Voucher Authorization 19 4.6.7. Client Copy 19 4.6.8. Voucher Submission 19 4.6.9. Standing Orders 19 4.6.10. Re-presentation 19 4.6.11. State Liability 19 4.6.12. EBT Provider’s Liability 19 4.6.13. Additional Procedures 20 4.6.14. Dispute Resolution 20 4.6.15. Electronic Submission of Manual Vouchers 20 4.6.16. Processing Rules for Electronic Submission of

Manual Vouchers 20

5. Requirements for Third Party Processors .................. 21


5.2. Interface Standards 21 5.2.1. Message Formats 21 5.2.2. Message Flows 21 5.2.3. Date-Related Processing 21

5.3. Testing 21 5.3.1. General Testing Requirements 21 5.3.2. Testing Schedules and Fees 22

5.4. Electronic Submission of Voucher Authorization

Advices 22

5.5. Performance Standards 22 5.5.1. Performance Requirements 22

5.6. Liquidated Damages ("LDs") 22

5.7. Provisions Regarding Liability 23 5.7.1. General 23 5.7.2. Limitation on Liability 23 5.7.3. Manual Entry of PAN 23 5.7.4. Electronic Advice Transactions 23

5.8. Phone Lines and Calls 23

5.8.1. Communication Lines 23 5.8.2. Calls 23

6. EBT Provider Processing and Support Services ......... 24


6.2. Mandatory and Optional Services -Definition 24

6.3. POS Service Definitions 24 6.3.1. Purchase (Mandatory) 24 6.3.2. Return (Mandatory) 24 6.3.3. TANF Cash Withdrawal (Optional) 24 6.3.4. Balance Inquiries at POS Terminals (Optional)

24 6.3.5. POS Offline Processing (Optional) 24

6.4. Other Transaction Definitions 24 6.4.1. Reversals (Mandatory) 24 6.4.2. Key-entered Transactions (Mandatory) 24 6.4.3. Settlement / Closeout Activities (Mandatory) 24 6.4.4. Void Last Transaction (Mandatory) 24

7. Transaction Processing Rules ....................................... 25

7.1. General Rules 25 7.1.1. Requirement for Card 25 7.1.2. Primary Account Number (PAN) 25 7.1.3. Personal Identification Number (PIN) 25 7.1.4. Partial Approvals 25 7.1.5. Store and Forward of Reversals and Advices 25

7.2. Receipt Requirements 25 7.2.1. Online Transactions 25 7.2.2. Benefit Draft Transactions – Manual and

Electronic Vouchers 26

7.3. POS Transactions 26 7.3.1. Payee Identification 26 7.3.2. Electronic Voucher Submission Period 26 7.3.3. Transaction Limits 26

8. Settlement Procedure .................................................... 27

8.1. General 27

8.2. Daily EBT System Cut-Off Time 27

8.3. TPP Cut-Off 27

8.4. Settlement Day 27

8.5. Settlement Accounts 27

8.6. Management of Settlement Accounts 27

8.7. Settlement Process 27

8.8. Settlement Posting 28

8.9. Settlement Reports 28

8.10. Discrepancies and Adjustments 28

8.11. Unsettled Funds 28



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9. Resolution Procedure for Disputed EBT Program

Transactions .......................................................................... 29


9.2. Terminology 29

9.3. Funds Flow 29

9.4. Valid Reasons for Dispute 29

9.5. Maximum Time to Initiation 29

9.6. Dispute Resolution 29 9.6.1. Initiated by an Entity Other than the Client 29 9.6.2. Initiated by the Client 30

9.7. Retrieval Request 30

9.8. Limitation of Liability 30

10. Fees ............................................................................. 31


10.2. Fees That May Be Charged By Retailers to Clients31 10.2.1. SNAP Fees 31 10.2.2. TANF Cash Fees 31

10.3. Allowances to Retailers 31 10.3.1. Supply and Telephone Reimbursement Fees 31 10.3.2. TANF Cash Withdrawal Fees 32 10.3.3. Reimbursement of Fees 32

11. Graphics Standards .................................................. 33

11.1. Network Mark 33

11.2. Right to Use the Lone Star Mark 33

11.3. Responsibility for Use of Lone Star Mark 33

12. General Business Terms and Conditions ................ 34

12.1. Primacy of Operating Rules 34 12.1.1. Texas Uniform Commercial Code 34 12.1.2. Conflict with Federal and State Laws 34 12.1.3. Conflict with Local Laws 34 12.1.4. Conflict with EBT Processor Interface

Specifications 34 12.1.5. Amendments to Operating Rules 34

12.2. Concentration Account Security 34

12.3. Confidentiality 34 12.3.1. Confidential Information 34 12.3.2. Obligations 35 12.3.3. Permitted Disclosures 35 12.3.4. No Right or Title 35 12.3.5. No Disassembly of Equipment 35 12.3.6. Adequate Security 36 12.3.7. Reasonableness 36 12.3.8. Survivability 36

12.4. Representations and Warranties 36 12.4.1. By the EBT Provider 36

12.4.2. By Retailer or TPP 36

12.5. Indemnities 37

12.6. Limitations of Liability 37

12.7. Force Majeure 37 12.7.1. Suspension 37 12.7.2. Right to Terminate 37

12.8. Entire Agreement 37

12.9. Amendments 37

12.10. Assignment and Subcontracting 37 12.10.1. By Retailer or TPP 37 12.10.2. By the EBT Provider 38

12.11. Waiver 38

12.12. Severability 38

12.13. Relationship of the Parties 38

12.14. Successors; Third-Party Beneficiaries 38

12.15. Choice of Law 38

12.16. Notices 38 12.16.1. Method of Notification 38 12.16.2. Confirmation of Notice Delivery 39 12.16.3. Change of Address or Fax Number 39

12.17. Arbitration 39

13. Network Administrative Procedures ....................... 40

13.1. Variance Procedures 40 13.1.1. Requests for Variances 40 13.1.2. Action by the EBT Provider 40 13.1.3. Action by HHSC 40 13.1.4. Variance Policy 40

13.2. Grievance Resolution 40 13.2.1. Complaints 40 13.2.2. Investigation 40 13.2.3. Authority of the EBT Provider 40 13.2.4. Informal Review by HHSC 40 13.2.5. Records 41

13.3. Procedures for Terminated Retailers and TPPs 41 13.3.1. Termination of Use of Lone Star Mark 41 13.3.2. Use of Texas EBT System 41 13.3.3. Continued Liability for Disputed Transactions41 13.3.4. Other Rights and Liabilities 41

14. Interoperability .......................................................... 42

15. Glossary of Terms and Definitions ........................... 43


General Participation Requirements and Standards Page 1

Version 7.0 May 2017

1. General Participation Requirements and Standards

1.1. Introduction

This Section describes the participants, relationships and

general requirements for participation in the Texas

Electronic Benefit Transfer (EBT) Program. All

capitalized terms in these Operating Rules are defined in

the Glossary at the end of this document, or, in some cases,

the first time they occur in the body of this document.

1.2. Operation of the Texas EBT Program

The implementation and operation of the Texas EBT

Program has been contracted by the Health and Human

Services Commission (HHSC) to Fidelity Information

Services, LLC (FIS) to deliver Retailer Management

services, EBT Call Center services, and Central Processor

services for the Texas EBT system, hereinafter referred to

in this document as the “EBT Provider.” The EBT

Provider authority with respect to the Texas EBT Program,

has been contractually delegated to them by HHSC.

1.3. Participation in the Texas EBT Program

1.3.1. Lone Star Cards

The EBT Provider and the State issue magnetic stripe Lone

Star Cards to Clients for benefit account access. HHSC

determines Client eligibility for benefits and conveys that

information to the Texas EBT System. Lone Star Cards are

not returned or collected if a Client is no longer eligible.

Therefore, all Lone Star Card usage is validated and

updated online, either through terminals connected to the

Texas EBT Network or through telephonic Voucher

Authorization and manual procedures.

1.3.2. General Retailer Eligibility

Participation in the Texas EBT Program is limited to

Retailers who are authorized by United States Department

of Agriculture (USDA) Food and Nutrition Service (FNS)

to provide food purchase services to Texas Supplemental

Nutrition Assistance Program (SNAP) Clients or Retailers

and/or who meet Federal and State requirements to redeem

Temporary Assistance for Needy Families (TANF) Cash

Benefits. Participating Retailers must connect to the Texas

EBT Network through a Third-party Processor (TPP) that is

certified to process Texas EBT Transactions. A Retailer

may act as its own TPP, and in that role must meet all TPP

requirements in these Operating Rules.

Retailers may redeem SNAP benefits (if authorized by

FNS), TANF Cash Program benefits, or both. Each SNAP-

Authorized or non-SNAP Retailer that elects to redeem

TANF Cash Program benefits must certify in writing that

the Retailer complies with the Lone Star Operating Rules

and with all State and Federal requirements related to the

redemption of TANF Cash Program benefits (see Sections

1.3.3 and 1.3.4).

The EBT Provider supplies point-of-sale (POS) equipment

to retailers that are qualified to receive free equipment and

services for the redemption of SNAP benefits (per Section

3.2.3). Only retailers that are exempt are eligible for free

POS equipment that handles EBT-only transactions.

Exempt Retailers, as determined by FNS, are farmers’

markets, direct marketing farmers, military commissaries,

non-profit food buying cooperatives, and community meal

services programs. The EBT Provider also acts as the TPP

for Retailers with whom an FIS Application and Agreement

for Benefits Redemption has been executed.

Subject to Federal regulations, non-exempt Retailers with

monthly average SNAP benefit redemptions below $100

who were authorized before March 21, 2014, may continue

to use pre-authorized Manual Vouchers only if they were

processing Texas EBT Program Transactions exclusively

by Manual Vouchers on or before March 21, 2014.

1.3.3. Non-SNAP Retailer Eligibility

In accordance with terms and conditions contained in these

Operating Rules, a Retailer that is not authorized to

participate in the SNAP Program may redeem TANF Cash

Program benefits. Such Retailers will execute a Retailer

Participation Agreement with 1) a TPP that is certified to

process Texas EBT Network Transactions or 2) the EBT

Provider. By signing the Agreement, the Retailer certifies

compliance with all State and Federal rules and regulations

related to TANF Cash Program benefits, including that:

no more than 10% of the Retailer’s gross revenue is

derived from Entertainment (which is defined as the

sale of alcoholic beverages, legalized games of

chance, sexually-oriented materials, coin-operated

amusement machines or amusement services (Texas

Administrative Code, Title 1, Part 15, Chapter 372,




Subchapter G, RULE §372.1701));

the Retailer shall not redeem TANF Cash Program

benefits for ineligible products (which are goods and

services that are not necessary and essential to the

welfare of the children, such as alcoholic beverages,

tobacco products, lottery tickets, adult entertainment,

firearms, ammunition, bingo, illegal substances, etc.);

the Retailer is not a liquor store, casino, gambling

casino, or other gaming establishment, or a retail

establishment which provides adult-oriented

entertainment in which performers disrobe or perform

in an unclothed state for entertainment (as defined in

Public Law 112-96, Section 408 of the Social Security

Act, 42 U.S.C. 617); and

the Retailer’s participation in the Texas EBT Network

is a sound business decision for Texas clients who

receive TANF Cash Program benefits.

If a Retailer that has executed a Retailer Participation

Agreement changes its business model, the Retailer will

report the change to their TPP or to the EBT Provider, as

appropriate. The Retailer must also submit a new signed

statement confirming that the Retailer’s new business

model complies with State and Federal requirements

related to TANF Cash Program benefits.

Non-SNAP Retailers will be required to pay for their own

equipment and services. The Retailer’s participation shall

be limited to TANF Cash Program benefits (not SNAP).

1.3.4. TANF Cash Participation

SNAP-authorized and non-SNAP Retailers must comply

with State and Federal requirements related to TANF Cash

Program benefits. Retailers may redeem TANF Cash

Program benefits as follows:

1. redemption of TANF Cash Program benefits to effect a

purchase from Retailer and/or to obtain cash (i.e., no

purchase required) in any amount up to the account

balance;

2. redemption of TANF Cash Program benefits to effect a

purchase from Retailer and/or to obtain cash (i.e., no

purchase required) once a day in an amount not to

exceed a limit (selected by Retailer) in excess of any

purchase amount or where no purchase occurs; or

3. redemption of TANF Cash Program benefits only to the

extent necessary to effect a purchase from Retailer.

Retailers electing to redeem TANF Cash Program benefits

pursuant to option 1 or 2 above may also select the hours

during Retailer's regular operating hours in which "cash

back" in excess of a purchase or where no purchase occurs

will be available, provided that such "cash back" service is

available at least during the hours that the Retailer provides

regular check cashing and debit card services to other

customers.

Retailers must ensure that TANF Cash Program benefits

are not redeemed for ineligible products. Ineligible

products are goods and services that are not necessary and

essential to the welfare of the children, such as alcoholic

beverages, tobacco products, lottery tickets, adult

entertainment, firearms, ammunition, bingo, illegal

substances, etc. Eligible products for purchase with TANF

Cash Program benefits are goods and services necessary

and essential to the welfare of the children, such as food,

clothing, housing, furniture, transportation, laundry,

medical supplies, household supplies, and recreation (see

the Texas Administrative Code, Title 1, Part 15, Chapter

372, Subchapter F, Division 1, RULE §372.1509, (b)).

On a quarterly basis, the EBT Provider will obtain and

review the list of non-SNAP (TANF-only) Retailers that

have agreements with TPPs and their sub-processors for

processing TANF transactions and initiate appropriate

action with the TPP to remove Retailers that derive more

than ten percent (10%) of the location’s gross revenue from

the sale of Entertainment; that are a liquor store, casino,

gambling casino, or other gaming establishment, or a retail

establishment which provides adult-oriented entertainment

in which performers disrobe or perform in an unclothed

state for entertainment; or that redeem TANF Cash

Program benefits for ineligible products. The TPP or EBT

Provider may, if deemed necessary, audit the Retailer

location to verify the Retailer’s certification to ensure that

they are complying with State and Federal TANF Cash

Program requirements.

1.3.5. Participation Agreements

All SNAP and non-SNAP Retailers must sign a Texas EBT

Retailer Participation Agreement (either with a TPP or the

EBT Provider) and, by so doing, agree to abide by these

Operating Rules and any amendments thereto. All TPPs,

including Retailers that act as their own TPP, must sign a

TPP agreement with the EBT Provider; and by so doing,

the TPPs also agree to abide by these Operating Rules and

any amendments thereto.




If a SNAP-authorized or non-SNAP Retailer requests to

redeem TANF Cash Program benefits, but does not certify

in writing that they will comply with the Operating Rules

and State and Federal requirements related to the

redemption of TANF Cash Program benefits, then the TPP

may not sign an agreement with the Retailer to process

TANF Cash Program benefits.

TPPs must ensure that all sub-processors and Retailers,

with whom they have agreements to process Texas EBT

Transactions, follow all requirements of these Operating

Rules and the TPP agreement.

1.4. Participation Standards

1.4.1. Operations in Conformance with Regulatory Standards

Each Retailer and TPP shall observe operational standards

in conducting Texas EBT Network Transaction operations

so that such Retailer and TPP will comply with any

standards imposed upon them by applicable regulatory

authorities from time to time, including, but not limited to

the FNS Regulations at 7 CFR § 274. Each Retailer and

TPP shall conduct all phases of their EBT program in a

financially sound manner so as to ensure ability to meet

their obligations to their EBT Clients, with regards to

providing cash back services.

1.4.2. Maintenance of Records

Each Retailer or TPP shall maintain all Texas EBT

Network Transaction records or copies thereof

communicated by Retailer/TPP to the Texas EBT System,

or by the Texas EBT System to Retailer/TPP, for a period

of five (5) months (or such longer period of time as may be

required under applicable state or local laws or

regulations), and shall make such records promptly

available for examination by representatives of the EBT

Provider, HHSC, or other authorized State or Federal

government agency.

1.4.3. Cooperation in Error Resolution

Each Retailer and TPP is obligated to fully cooperate with

the EBT Provider and/or HHSC in the resolution of

disputes and errors in accordance with the procedure for

resolution of such disputes defined in Section 9 of these

Operating Rules.

1.4.4. Examinations

Each Retailer and each TPP shall be subject to and shall

cooperate with special examination by the EBT Provider

and/or HHSC to ensure that the Retailer or TPP is

complying with the provisions of the Operating Rules,

including the EBT Processor Interface Specifications. Such

examination shall be for probable cause as determined by

the EBT Provider and/or HHSC.

1.4.5. Remedial Action

If any examination described above in Section 1.4.4 reveals

a materially adverse condition or discrepancy, such Retailer

or TPP shall take appropriate corrective action promptly.

In an appropriate case, the EBT Provider and/or HHSC

may (a) make a recommendation to FNS to impose

conditions upon the Retailer’s and/or TPP's continued

participation in the SNAP program or (b) require the

Retailer and TPP to withdraw from participation in the

TANF EBT Program, subject to Section 13. Only FNS has

the authority to execute an involuntary withdrawal of a

Retailer from the SNAP Program.

1.5. Lone Star Card Standards

All Lone Star Cards will conform to the standards and

specifications described in these Operating Rules. In

addition, each Lone Star Card must have been issued by the

EBT Provider or the State in order to access an individual

Client's benefit account(s).

1.5.1. Encoding and Embossing

All Lone Star Cards will comply with the International

Standards Organization (ISO) standards for the encoding of

Track II of the magnetic stripe and the embossing of the

face of the card.

1.5.2. Restriction on Use

The Lone Star Mark will only be used on cards issued by

the EBT Provider, or the State and will not be placed on

any card which does not qualify for use as described in

Section 11.

1.5.3. PIN

All clients holding Lone Star Cards will use Personal




Identification Numbers (PINs). PINs will meet ISO

standards, i.e., they must be alphanumeric and be four (4)

characters/digits in length.

1.5.4. Electronic Funds Transfer Capability

Each Lone Star Card shall be capable of initiating an

electronic funds transfer (as defined in Regulation E, 12

CFR § 205).

1.6. Non-Discrimination

The Retailer (and the TPP) shall treat transactions by

Clients in the same manner as transactions effected by

other electronic methods and forms of tender (e.g., credit

and debit cards), and within applicable laws; with the

exception that SNAP and TANF Clients shall not be

required to sign POS terminal receipts generated as a result

of such transactions.

1.7. Confidentiality of Client Information

The Retailers and TPPs shall not disclose Client

information to anyone other than the EBT Provider and/or

HHSC for the purpose of completing an EBT Program

Transaction, to comply with error resolution procedures or

as necessary in connection with examinations as set forth in

these Operating Rules, fraud investigations, or as otherwise

specifically required by law and/or these Operating Rules.


Common Retailer Requirements Page Version 7.0 May 2017

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2. Common Retailer Requirements

2.1. Introduction

This Section describes the requirements common to all

Retailers who accept Lone Star Cards.

2.2. Honor All Cards

The Retailer shall promptly honor all valid Lone Star Cards

when presented by Clients for Texas EBT Network

Transactions. In addition, the Retailer must accept valid

EBT cards from any State for SNAP transactions.

2.3. No Discrimination

Retailers will not, on the grounds of disability, age, race,

color, religion, sex, political belief, national origin or

reprisal or retaliation for prior civil rights activity in any

program or activity conducted or funded by USDA: (i)

refuse to process a Client's Texas EBT Network

Transaction, or otherwise subject any Client to

discrimination, or (ii) discriminate in its employment

practices. Retailers shall post in conspicuous places,

available to all employees and applicants, notices with

respect to such nondiscrimination. Upon request of the

EBT Provider and/or the HHSC, Retailer must show proof

of such non-discrimination notices.

Retailers will fully comply with the Civil Rights Act of

1964 and the Rehabilitation Act of 1973 as amended.

Retailers will fully comply with all applicable requirements

of the Americans with Disabilities Act.

2.4. POS Terminals and Calls

2.4.1. Terminals

The Texas EBT Network will accommodate POS

Terminals provided by the EBT Provider (See Section 3)

and also POS Terminals purchased or leased by Retailers

(from a party other than the EBT Provider) that interface

with a Texas EBT authorized TPP.

2.4.2. No Lane Restrictions

During all of Retailer's store hours of operation, at least

some of its checkout lanes that are equipped with POS

Terminals shall be made available to Clients to enable them

to access their EBT Program benefits.

Retailers must not establish special checkout lanes that are

only for Texas EBT Network Transactions. If special lanes

are designated for the purpose of accepting other electronic

debit or credit cards and/or other commercial customer

transactions employing methods of payment such as

checks, Clients with Lone Star Cards may also be assigned

to such lanes.

2.4.3. Calls

There will be no charge to Retailers or Clients for online

transaction communication calls made by Retailers directly

to the Texas EBT System (i.e., via State-supplied

Equipment directly to the Texas EBT System). There will

be no charge to Retailers or Clients for calls made to the

EBT Provider Call Center or Merchant Help Desk.

2.5. Lone Star Service Mark

The Lone Star service mark is owned by HHSC.

2.5.1. Display at Point of Sale

The Retailer shall display signs or indicators with the Lone

Star service mark to inform the public that Lone Star Cards

will be honored at the Retailer's place of business. These

signs or indicators will be displayed in locations consistent

with current trade practices for sign placement of similar

electronic payment transactions. The EBT Provider will

make available window decals at no cost to the Retailer.

Signs of a special size or color shall be produced and paid

for by the Retailer. Artwork for these signs can be obtained

from the EBT Provider through the EBT Provider’s

Merchant Help Desk.

2.5.2. Other Use of Lone Star Mark

Any state logo (e.g., the Lone Star Mark) used by the

Retailer may vary reasonably in size and/or color from

those provided by the EBT Provider, provided that Retailer

otherwise complies with Section 11 of these Operating

Rules regarding Graphics Standards. Upon termination of

the Retailer agreement for any reason, the Retailer shall

cease using or displaying the Lone Star Mark. (See also

Section 11 regarding Graphics Standards.)

2.6. TANF "Cash Back" Charges; SNAP Charges; Sufficient Cash



6

Except as may be specifically provided in Section 10,

Retailers shall not charge Clients for redeeming TANF

Cash Program benefits using the Texas EBT Network.

Retailers shall not charge clients for redeeming SNAP

benefits via the Texas EBT Network.

Retailers redeeming TANF Cash Program benefits by

providing "cash only" transaction (i.e., no purchase

required) must use their best efforts to anticipate such "cash

only" transaction volumes and to maintain a sufficient

amount of cash on hand to accommodate such "cash only"

transaction volumes.

2.7. Online POS Services Requirements

2.7.1. Requirement for Online Authorization

A Retailer must submit all Texas EBT Network

Transactions for electronic online authorization whenever

the Texas EBT system is operational and accessible by the

Retailer.

2.7.2. Entry of Primary Account Number (PAN)

Other than for the exceptions noted below, the Retailer

shall utilize a POS card reader compatible with the Texas

EBT card(s) at the point-of-sale for purposes of initiating

all Texas EBT Network Transactions. The exceptions are:

1. Manual Voucher transactions, pursuant to Section 3.4

and 4.6; and

2. Fallback manual PAN entry: Manual entry of the PAN

may be used only when all the following conditions are

met:

a. The magnetic stripe on the Lone Star Card is

unreadable, or the Magnetic Stripe Card reader is

temporarily inoperative;

b. The POS Terminal is operated by, or in

conjunction with, Retailer personnel. (This

condition disallows manual PAN entry at an

unattended terminal); and

c. A Client and their Lone Star Card are physically

present at the time and location of the Texas EBT

Network Transaction.

2.7.3. Enforcement of PIN Usage

The Retailer shall require that the Client enter their PIN

through the PIN pad at, or in proximity to, the point of sale

when initiating a Texas EBT Network Transaction, except

for a Manual Voucher, as provided for in Section 3.4 and

4.6.

2.7.4. No Possession of PIN

At no time shall a retailer possess a Client’s PIN or request

a Client to disclose their PIN.

2.8. No Card Retention

HHSC does not authorize the retention of a Client's Lone

Star Card for any reason. Specifically, HHSC does not

authorize a Retailer to retain a Lone Star Card following an

attempt by an individual to perform Texas EBT Network

Transaction which is subsequently denied due to a "lost" or

"stolen" status reported back to the POS Terminal by the

Texas EBT System.

2.9. Training

The EBT Provider will provide the Retailer with training in

the processing of Texas EBT Network Transactions,

including the operation of the Equipment (if supplied) and

Retailer will cooperate with and attend or participate in

such training session. The EBT Provider will work with

the Retailer to schedule a time for training if on-site

training is necessary or requested by the retailer.

Training shall include the use of POS equipment,

settlement and reconciliation procedures, manual voucher

procedures, interoperability, and Retailer Help Desk

training. The EBT Provider, upon request, will provide

Retailer train the trainer training with respect to the

teaching of the contents of training materials, to enable

Retailer's trainers to train Retailer employees who are

subsequently involved in the processing of Texas EBT

Network Transactions. Neither HHSC nor the EBT

Provider will be held liable or responsible for the training

or lack of training provided by a Retailer if said Retailer

waives training.

The Retailer may, at its option, waive training, provided

that such Retailer certifies (via a logged telephone call with

the EBT Provider indicating date, time and Retailer

representative making the certification), prior to processing

Texas EBT Network Transactions via the Texas EBT

System, that the Retailer understands the materials

provided, can operate the Equipment (if provided), and has

instructed its employees and assumes all liability if their

errors result in loss or damage to the Retailer.

The EBT Provider agrees to furnish instructions to the

Retailer concerning records, vouchers and other



7

documentation to be made and/or completed in connection

with the processing of Texas EBT Network Transactions.

Retailers shall follow any procedural instructions with

respect to the completion of such documentation and with

respect to the processing of Texas EBT Network

Transactions, which are provided to Retailers by the EBT

Provider.

2.10. Provisions Regarding Liability

2.10.1. General

1. The EBT Provider shall be liable for each Texas EBT

Network Transaction authorized by them, and shall

settle for the full amount of such Transaction, subject to

the other provisions of these Operating Rules (e.g.,

Sections 3.4, 4.6, 2.10.4 and 2.10.5).

2. Any Texas EBT Network Transaction that is

erroneously authorized by the EBT Provider and

executed by Retailer due to defects in the Equipment

and/or Software provided by the EBT Provider shall be

the responsibility of the EBT Provider, and the EBT

Provider shall be liable in the amount of the

Transaction. However, any Texas EBT Network

Transaction that is erroneously authorized and executed

due to Retailer's and/or Retailer TPP’s noncompliance

with these Operating Rules shall be the responsibility

of Retailer and/or Retailer’s TPP, and Retailer and/or

Retailer’s TPP shall be liable in the amount of the

Transaction.

3. Neither the EBT Provider nor the State shall be

responsible or liable for any Texas EBT Network

Transactions not authorized by the EBT Provider or

any Losses incurred by any party in connection

therewith.


responsible or liable for any Losses to any party arising

out of Texas EBT Network Transactions with respect to

which Retailer and/or Retailer's TPP transmits an

approval to a POS Terminal of Retailer after receiving

a rejection from the Texas EBT System.


responsible or liable to any party for any Texas EBT

Network Transaction until such Texas EBT Network

Transaction has been electronically accepted by the

Texas EBT System. Retailer and Retailer's TPP will

indemnify and hold HHSC, the EBT Provider, their

parent corporations, affiliates, employees, contractors

and agents harmless from and against all Losses

incurred as a result of or incident to Texas EBT

Network Transactions processed via a TPP and

erroneously processed due to the negligence or willful

misconduct of the Retailer, the Retailer's employees

and/or the TPP.

2.10.2. Retailer Liability Limitations

Retailer shall not be responsible or liable with respect to

any Texas EBT Network Transaction (or any Losses

incurred in connection therewith) which is shown to be

incorrectly or fraudulently initiated or completed directly as

a result of actions of the EBT Provider or omissions for

which the EBT Provider are specifically responsible under

an agreement or these Operating Rules.

The EBT Provider’ maximum total liability with respect to

any Texas EBT Network Transaction (or any Losses in-

curred in connection therewith) which is shown to be

incorrectly or fraudulently initiated or completed directly as

a result of actions of the EBT Provider or omissions for

which the EBT Provider are specifically responsible under

a Retailer agreement, TPP agreement or these Operating

Rules, shall be limited to the amount of the Texas EBT

Network Transaction.

2.10.3. PAN Entry

After settlement, the EBT Provider shall have no further

responsibility or liability for any Texas EBT Network

Transaction involving manual PAN entry, and acceptance

and settlement thereof, even under circumstances where the

PAN entry is subsequently determined to have been

accomplished through fraud and/or unauthorized use of a

PIN. Retailer will indemnify and hold HHSC, the EBT

Provider, parent corporations, affiliates, employees,

contractors and agents harmless from and against all Losses

incurred as a result of or incident to all such Texas EBT

Network Transactions where the fraud and/or unauthorized

PIN use is on the part of the Retailer, Retailer's employees

or agents.

2.10.4. Manual Voucher Transactions

Manual Voucher Transactions given Voucher

Authorization and otherwise processed in accordance with

these Operating Rules will be settled by the Texas EBT

System. (See Section 8, Settlement Procedures.) Neither

the EBT Provider nor the State shall be responsible or

liable for Manual Voucher Transactions where such



8

Transactions are not given Voucher Authorization (subject,

however, to Section 2.11), or, although given Voucher

Authorization, are not processed by Retailer in accordance

with Section 3.4 and 4.6.

In addition, after settlement, the EBT Provider and the

State shall have no further liability or responsibility for

Manual Voucher Transactions given Voucher

Authorization by the Texas EBT System and otherwise

processed by Retailer in accordance with Section 3.4 and

4.6, and subsequently determined to have been generated

through unauthorized use of a Lone Star Card (or the

information contained on a Lone Star Card). Retailer will

indemnify and hold HHSC, the EBT Provider, parent

corporations, affiliates, employees, contractors and agents

harmless from and against all Losses incurred as a result of

or incident to all such Texas EBT Network Transactions

where the unauthorized use of a Lone Star Card (or the

information contained on a Lone Star Card) is on the part

of the Retailer, Retailer's employees or agents.

2.10.5. Electronic Voucher Settlement

Neither the EBT Provider nor the State shall be responsible

or liable to any party for any EBT Program Transaction

effected using Voucher Authorization and Electronic

Voucher settlement capabilities of a Retailer's or TPP's

system, which Texas EBT Network Transaction is

subsequently rejected by the Texas EBT System upon

electronic submission on account of Retailer's and/or

Retailer TPP's failure to follow the procedures set forth in

Section 3.4 and 4.6.

2.11. Stand-In Processing

Notwithstanding anything in these Operating Rules to the

contrary, in the event (i) the Texas EBT System is

inoperative, (ii) access to the EBT Provider Merchant Help

Desk is unavailable, and (iii) HHSC and the EBT Provider

has determined the need for implementing Stand-In

processing and the EBT Provider has communicated same

to the Retail community, a Retailer may process Manual

Voucher Transactions (SNAP purchases or TANF Cash)

without first obtaining prior authorization and a Voucher

Authorization number from the EBT Provider Merchant

Help Desk. If any such Transaction is later rejected as a

result of there being insufficient funds in the applicable

Client EBT Benefit account at the time the Manual

Voucher is presented for processing and payment, the EBT

Provider will indemnify Retailer for the amount of the

Retailer's loss, up to a maximum of twenty-five dollars

($25) per day per client. Settlement of stand-in vouchers is

contingent upon the following: the Manual Voucher

Transaction is processed in accordance with the Operating

Rules and Retailer's Agreement, excepting (a) the

requirement that Retailer receive an authorization and a

Voucher Authorization number from the EBT Provider

Merchant Help Desk prior to processing; (b) the Retailer

shall submit the Manual Voucher by mail for payment to

the EBT Provider as soon as possible, but no later than five

calendar days after the date of the Stand-In period; and (c)

the Retailer shall not knowingly process Manual Voucher

Transactions for the same client in a cumulative amount

greater than twenty-five ($25) dollars per day.

If the Texas EBT Host system is unable to authorize

transactions and is expected to be down for more than 30

minutes, HHSC and the EBT Provider may invoke Stand-In

processing. The EBT Provider will notify Retailers of the

start and end times for the period during which the stand-in

process will be active. If HHSC and the EBT Provider

elect to extend the end time for a Stand-in period,

additional notifications will be distributed, as appropriate.

Retailers will not be expected to obtain a Voucher

Authorization number for Manual Vouchers processed

during the designated Stand-In period, but will need a

Voucher Authorization number for any Manual Vouchers

processed outside of the Stand-In period. Retailers may

attempt to settle each Manual Voucher via the POS

Terminal once the system becomes available. Stand-In

Manual Vouchers rejected due to insufficient funds must be

mailed to the EBT Provider for settlement.

The EBT Provider will provide the procedures for Stand-In

processing to state-supported retailers and to TPPs.

The use of Stand-In processing will be reassessed

periodically. HHSC will solicit comments and suggestions

from the Texas EBT-Retailer Stakeholder Group in the

course of such reassessment and will consider in good faith

comments and suggestions received.

2.12. Additional Retailer Provisions

2.12.1. Miscellaneous Obligations

By entering into an agreement with the EBT Provider or a

TPP, each Retailer thereby acknowledges that its

participation in the Texas EBT Program is voluntary. In

the event a Retailer is suspended or terminated as a

redeemer of SNAP benefits and/or TANF Cash Program



9

benefits, respectively, for any reason, such Retailer shall

immediately (i) notify the EBT Provider of such event, and

(ii) cease utilization of the Texas EBT Network to redeem

such benefits as to which Retailer's authorization was

suspended or terminated.

Retailers shall comply with all applicable standards, orders

and/or requirements issued under Section 306 of the Clean

Air Act (42 USC 1857(h)), Section 508 of the Clean Water

Act (33 USC 1368), Executive Order 11738, and

Environmental Protection Agency regulations (40 CFR Part

15).

Retailers shall comply with the requirements of the

Immigration Reform and Control Act of 1986 regarding

employment verification and retention of verification forms

for any individuals hired on or after November 6, 1986,

who will perform any labor or services in connection with

these Operating Rules.

Retailers shall comply with mandatory standards and

policies relating to energy efficiency which are contained in

the State energy conservation plan issued in compliance

with the Energy Policy and Conservation Act (Public Law

94-163).

By entering into an agreement with the EBT Provider or a

TPP, each Retailer thereby certifies that it owes no funds to

HHSC or the State of Texas for an unresolved audit

exception. An unresolved audit exception is an exception

for which the offeror has exhausted all administrative

and/or judicial remedies.

In order to comply with the Internal Revenue Service (IRS)

requirement to report the Retailer’s EBT sales to the IRS,

the Retailer shall provide their tax identification number

(TIN) to their TPP. State-supported Retailers will report

their TIN to the EBT Provider by submitting a W9 form

with their Retailer Agreement. If the Retailer does not

provide their TIN to their TPP, the law requires the TPP to

hold back money from the Retailer’s bank deposits.

The EBT Provider creates and issues Form 1099K to State-

supported Retailers.


Requirements for Retailers Operating State-Supplied Terminals Page Version 7.0 May 2017

10

3. Requirements for State-Supported Retailers

3.1. Introduction

This Section describes the requirements specific to

Retailers who operate POS Terminals or use manual

vouchers supplied by the EBT Provider on behalf of

HHSC. These requirements are in addition to those defined

elsewhere in these Operating Rules, which are applicable to

all Texas EBT Program Retailers.

3.2. Standard POS Terminal Equipment

POS Terminal Equipment will be provided by the EBT

Provider to those exempt Retailers that elect to use State-

supplied Equipment to process Texas EBT Network

Transactions and do not use other equipment for such

purpose.

3.2.1. Terminal Allocation

HHSC shall determine the number of terminals to be

installed based upon a consideration of the reporting or

sales information described in Section 3.2.2 and the

Equipment deployment provisions set forth in

Section 3.2.3.

3.2.2. SNAP Participation

If the Retailer desires to process SNAP Transactions, the

Retailer must be authorized by USDA FNS prior to

participating in the Texas EBT Program. At startup and as

an ongoing procedure, HHSC and/or FNS will review sales

and other retailer location information (from FNS reporting

or Retailer reporting) for each retailer location. Data to be

reviewed and monitored may include monthly gross sales,

monthly total food sales and monthly total SNAP benefit

redemptions.

3.2.3. Equipment Provision

Retailer shall be entitled to receive, and the EBT Provider

(on behalf of HHSC) shall provide at no additional cost to

the Retailer, consisting of up to the number of POS

Terminals called for under 7 CFR § 274.3(b), subject

however, to Section 3.2.4.

Retailers who are over the $100 per month average

redemption minimum set forth in Section 3.2.4, shall

receive at least one POS Terminal provided by the EBT

Provider (on behalf of HHSC) at no additional cost to the

Retailer.

The Equipment provided by the EBT Provider must be

installed at the Retailer location(s) set forth in the Retailer

agreement, and Retailer must keep such Equipment at such

locations and must not remove, transfer or transport the

Equipment to any other location.

POS Terminals supplied by the EBT Provider must be

placed in easily accessible locations at checkout lane points

of purchase (and Retailer's store must be in compliance

with Americans with Disabilities Act). POS Terminals

may also be installed in readily accessible customer service

areas.

Retailers may, in their discretion, lease additional POS

Terminals from the EBT Provider, and the EBT Provider

shall lease such POS Terminals in accordance with its

standard terms and conditions. Any such additional leased

terminals acquired from the EBT Provider shall be

considered Equipment for purposes of these Operating

Rules.

HHSC will review adequacy of terminal deployment and

lane coverage on a minimum of an annual basis using the

previous 12 months of sales information described in

Section 3.2.2. In addition, a Retailer may request such a

review at any time during the year. The findings will

determine if the Retailer is entitled to receive a greater or

lesser number of POS Terminals at a given location. The

review is done at no additional charge to the Retailer.

If a Retailer is entitled to additional Equipment, the EBT

Provider shall provide Retailer at its applicable Retailer

locations, such additional POS Terminals which Retailer

requests and to which the Retailer is entitled. If Retailer is

entitled to less Equipment, Retailer shall promptly return

and/or arrange for the EBT Provider to repossess or remove

any excess Equipment and Software provided by the EBT

Provider.

3.2.4. Minimum Redemptions

In the event a Retailer's SNAP benefit redemptions amount

to less than one hundred dollars ($100) per month on

average over a six month period (validated by sales



11

estimates or history provided by the Retailer or derived

from the Texas EBT System) the Retailer will not be

provided POS Equipment. In such event, however, such

Retailer will be permitted to participate in the Texas EBT

Program via the Manual Voucher transaction process

described in Section 3.4, and such Retailer may, at its cost,

choose to lease or otherwise acquire the hardware, software

and equipment necessary to interface with the Texas EBT

Network and participate electronically in the Texas EBT

Program. Redemption reviews will occur not more than

every 12 months.

3.2.5. Terminal Installation

1. Counter Space, Terminal Environment. Retailer

shall be responsible for providing adequate checkout

lane counter space and, if applicable, customer service

area counter space. Retailer shall maintain the

environment wherein Equipment is installed. The

terminal must be accessible to Clients so that Clients

can enter their own Personal Identification Number

(PIN).

2. Phone Lines. Retailers are expected to provide a

telephone line(s) (either new or existing) for use with

State-supplied POS Terminals. HHSC will reimburse

Retailers who use State-provided equipment for the

cost of usage of the telephone line(s) attributed to the

processing of Texas EBT Network Transactions as

specified in Section 10.3.1.

3. Notwithstanding anything in these Operating Rules to

the contrary, the EBT Provider or HHSC will not

provide or arrange for electricity to be provided to, or

wire, Retailer locations that do not currently have

electricity or require additional capacity from a utility.

If Retailer chooses to participate in the Texas EBT

Program at locations without electricity, Retailer must

provide electricity or utilize Manual Vouchers at such

locations.

3.2.6. Restricted Use of EBT Terminals

Retailer may only use the State-supplied Equipment for

processing Texas EBT Network Transactions that are

within the scope of Retailer's participation as set forth in

Retailer's agreement(s) with the EBT Provider.

3.2.7. Instructions and Assistance

The Retailer must follow the instructions contained in all

training materials and other documents accompanying the

Equipment and/or separately provided by the EBT Provider

with regard to the Equipment, as such may be amended

and/or updated from time to time, including but not limited

to instructions relating to the necessary environment for the

Equipment, the installation of the Equipment (if

applicable), and the care and use of the Equipment.

To the extent the Retailer may be responsible for the

installation of any State-owned POS Terminals, (i) the EBT

Provider will provide clear written installation instructions,

(ii) such POS Terminals will have a self-test feature to

check its basic functionality, (iii) the EBT Provider will

provide a mechanism for Retailer to perform EBT Program

test transactions, (iv) Retailer will be permitted to call the

EBT Provider’s Help Desk for installation and/or testing

assistance, and (v) a trained technician will be scheduled

within two (2) business days for dispatch to the applicable

Retailer location (at no cost to Retailer) to assist Retailer in

the event Retailer is unable to successfully install and/or

test the POS Terminal(s) after all other measures have been

taken.

3.2.8. Equipment Repairs

Retailer must not make or attempt to make any repairs to

the Equipment (although Retailer shall be responsible for

changing the paper used by the Equipment). Retailer will

promptly notify the EBT Provider Help Desk of any

problems with the Equipment. The EBT Provider Help

Desk will either suggest corrective action or send

replacement Equipment at no cost to the Retailer.

The EBT Provider will replace Equipment that is not in

working order. If a State-supplied POS Terminal cannot

operate for EBT, it will be replaced (via mail) with working

equipment within forty-eight (48) hours (for stores with one

POS Terminal) or seventy-two (72) hours for stores with

multiple POS Terminals after the EBT Provider Help Desk

receives the call.

3.2.9. Ownership of Equipment

At all times, the Equipment shall be the sole property of the

EBT Provider, and Retailer shall have no rights in or to the

Equipment except the right to use it on the terms and

conditions set forth in the Retailer Agreement, including

these Operating Rules. The EBT Provider may replace the

Equipment with identical equipment or equipment with like

or similar functionality at any time and for any reason. If



12

such replacement equipment is not identical to the

Equipment it replaces, the change shall be minimal to

Retailers and Clients. The EBT Provider will offer

information and/or training for the Retailer on any

operational changes required when using non-identical

equipment.

Retailer must not at any time encumber, transfer, pledge or

sublease the Equipment in any way or take any actions

which in any way suggest, indicate or imply that Retailer is

the owner of the Equipment. In addition, the Retailer must

not at any time physically move the Equipment to another

location that is different from the retailer location

authorized by FNS.

3.2.10. Right of Inspection

The EBT Provider will have the right to inspect the

Equipment at any time (including, but not limited to, times

of emergency, crisis and disaster) during Retailer's normal

business hours, in order to ensure the proper functioning of

the Equipment. The EBT Provider will give the Retailer

reasonable prior notice of all such inspections and use its

best efforts to conduct such inspections at a time and in a

manner that results in minimal disruption to Retailer's

business.

3.2.11. Protection of Equipment

The Retailer must take all reasonable security measures to

protect the Equipment from loss, theft, damage (including

vandalism), destruction and unauthorized use, and Retailer

must immediately notify the EBT Provider Help Desk if

any Equipment is lost, stolen, damaged (including

vandalized), destroyed or in any way subject to

unauthorized use. The terms of this section 3.2.11 shall

survive the expiration or termination of any Retailer

agreement until the Equipment provided there under is

returned and/or repossessed by the EBT Provider.

3.2.12. NO WARRANTY AS TO EQUIPMENT

THE EBT PROVIDER AND HHSC HAVE NOT MADE,

AND DO NOT MAKE, ANY REPRESENTATION,

WARRANTY OR COVENANT, EXPRESS OR

IMPLIED, WITH RESPECT TO DESIGN, CONDITION,

DURABILITY, SUITABILITY, FITNESS FOR USE OR

RETAILER ABILITY OF THE EQUIPMENT IN ANY

RESPECT, EXCEPT THAT THE EBT PROVIDER

SHALL REPAIR OR REPLACE ANY EQUIPMENT

WHICH DOES NOT FUNCTION IN ACCORDANCE

WITH THE DESCRIPTIONS FOR THE EQUIPMENT

PROVIDED BY THE MANUFACTURER.

3.2.13. Removal of Equipment During Term of Agreement

If during the term of a Retailer agreement, the Retailer

installs and/or utilizes a POS Terminal system of its own in

compliance with these Operating Rules which is sufficient

and adequate to enable Retailer to comply with its Texas

EBT Program participation commitment as set forth in its

Retailer agreement, the EBT Provider shall, at no cost to

Retailer, remove the State-supplied Equipment and

Software within thirty calendar days of Retailer's written

request for removal, and the EBT Provider shall cooperate

with Retailer to effect a cutover to Retailer's POS Terminal

network and Retailer's TPP.

3.3. Limitation of Liability for Equipment

1. The EBT Provider shall be responsible for all theft,

damage, or destruction to Equipment, except for theft,

damage, or destruction to Equipment caused by

Retailer (including Retailer’s employees) and/or

resulting from Retailer's negligence (including that of

Retailer's employees). Retailer shall be responsible for

theft, damage, or destruction to Equipment caused by

Retailer (including Retailer's employees) and/or

resulting from Retailer's negligence (including that of

Retailer's employees).

2. Subject to paragraph one above, the EBT Provider shall

not be responsible for any Losses arising out of the use

or possession of Equipment by any Retailer, including

but not limited to lost profits. While Equipment is in

Retailer's possession, custody or control, Retailer shall

bear all liability for the use, possession, operation and

storage of such Equipment, including liability for

damage or injury to the property or person of Retailer

or third parties; provided however, that Retailer shall

not be liable for personal injury and or/damages to

property resulting from the negligence or willful acts of

the EBT Provider, its employees, contractors, or agents.

3. Subject to paragraph one above, Retailer will

indemnify and hold the EBT Provider, its parent

corporations, affiliates, employees, contractors and

agents harmless from and against all Losses incurred as

a result of or incident to Equipment, or the use,

possession, operation, or storage thereof; provided



13

however, that Retailer's obligation to indemnify and

hold harmless shall not apply in cases in which the

EBT Provider shall be found liable for personal injury

and/or damage to property resulting from the

negligence or willful acts of the EBT Provider, its

employees, contractors, or agents.

4. The terms of this Section 3.3 shall survive the

expiration or termination of any agreement between the

EBT Provider and Retailer.

3.4 Offline Manual Voucher Transactions

A Retailer may process offline (manual) SNAP

redemptions when it is able to contact the EBT Provider’s

Merchant Help Desk by telephone. A Retailer may, at its

option, process offline (manual) TANF Cash Program cash-

back or cash withdrawal redemptions when it is able to

contact the EBT Provider’s Merchant Help Desk by

telephone. Subject to Section 2.11, if authorization cannot

be obtained before or at the time of purchase, a Retailer

assumes the risk of insufficient benefits being available in

the client’s account.

Vouchers must be settled within fifteen (15) calendar days

of the date of the transaction. Vouchers that are not settled

within fifteen (15) calendar days will not be accepted for

reimbursement by the Texas EBT System.

3.4.1. Offline Transaction Capability

If a Retailer uses Manual Vouchers, the Retailer must

provide Manual Voucher services for completion of a

Texas EBT Network Transaction using the Client's Lone

Star Card when the state-supported retailer TPP’s system,

the Texas EBT System, the POS Terminal, or the PIN pad

is inoperative. Manual Vouchers must be submitted for

settlement via mail (Section 3.4.2) or via electronic

transmission (Section 3.4.2). When Manual Voucher

Authorizations are not available at the EBT Provider’s

Merchant Help Desk, the Stand-In processing option may

be available (see Section 2.11).

3.4.2. Manual Voucher Settlement Submission Rules

The Retailer must submit Manual Vouchers for settlement

in one of the following ways:

1. the Retailer may enter the Manual Vouchers into the

EBT Retailer website (www.ebtEDGE.com) or a POS

Terminal at the Retailer location and submit them as

Electronic Vouchers (in the form of an Advice

Transaction); or

2. the Retailer may send the original of Manual Vouchers

to the EBT Provider by mail or other means of

delivery, who will in turn enter the Texas EBT

Network Transaction into the Texas EBT system as

specified in Section 3.4.8.

It is the responsibility of the retailer to ensure delivery to

the appropriate location has occurred timely and the

voucher has been processed.

3.4.3. Manual Voucher Use Requirements

If electronic transaction processing using a POS terminal is

not available, for the reasons described in Section 3.4.1.

and the EBT Provider’s Merchant Help Desk is able to

provide transaction authorizations to the Retailer via

telephone, the Retailer may process SNAP and/or TANF

"cash withdrawal" and/or "cash purchase" Manual Voucher

Transactions.

3.4.4. Limits on Vouchers

The Texas EBT system does not impose any dollar limits

on authorized manual vouchers, other than the current

balance available in the account.

3.4.5. Voucher Contents

Subject to Section 2.11, Manual Voucher Transactions

effected without obtaining a Voucher Authorization

number from the EBT Provider’s Merchant Help Desk shall

be "at the risk of the Retailer." Neither the EBT Provider

nor the State shall be liable to Retailers with respect to such

Manual Voucher Transactions if insufficient funds exist in

the Clients' applicable EBT Program benefit accounts at the

time the Manual Voucher is presented for processing and

payment. Manual Vouchers are either accepted in total or

rejected in total for payment. No partial payments are

made for Manual Vouchers.

With respect to each Manual Voucher Transaction,

Retailers shall legibly and properly complete the Manual

Voucher, including the full names of the Client and sales

clerk’s initials, the Client's PAN as embossed on the

Client's Lone Star Card, the total purchase amount, the date

of the transaction, Voucher Authorization number, and

FNS Number for SNAP transactions (if Retailer is

authorized by FNS). Retailers must also obtain the Client’s



14

signature on all Manual Vouchers.

3.4.6. Voucher Authorization

Prior to completing any Manual Voucher Transaction, the

Retailer shall fill out the Manual Voucher as set forth in

Section 3.4.5 and (subject to Section 2.11) obtain a

Voucher Authorization (including a Voucher Authorization

number) for the amount of the Texas EBT Network

Transaction via telephone from the EBT Provider’s

Merchant Help Desk.

3.4.7. Client Copy

The Retailer shall deliver to the Client a true and complete

copy of the Manual Voucher executed in accordance with

Section 3.4.5.

3.4.8. Voucher Submission

Manual Voucher Transactions must be submitted (via mail

delivery or electronically as an Electronic Voucher) for

processing so as to be received by the EBT Provider within

fifteen (15) calendar days of the date of the transaction. If

by mail, the original Manual Voucher (and not a copy)

must be submitted for payment.

The EBT Provider will process Manual Vouchers within

three (3) Banking Business Days of its receipt thereof.

Manual Vouchers found to be incomplete or otherwise

improperly prepared and/or submitted shall be returned by

the EBT Provider to the Retailer for completion and/or

correction within four (4) Banking Business Days of the

date of the EBT Provider’s original receipt thereof. The

EBT Provider may utilize any reasonable means of

obtaining the missing and/or correct information, provided

such means are utilized and a determination is made within

the four (4) Banking Business Day period, as to whether

the Manual Voucher must be returned to the Retailer.

Corrections and re-submissions of Manual Vouchers must

occur within the 15 calendar days of the transaction—the

amount of time allowed for Manual Voucher submission.

The Client's EBT Program accounts shall be encumbered in

connection with a Manual Voucher Transaction at the time

the EBT Provider issues to the Retailer a Voucher

Authorization number for the amount of the Texas EBT

Network Transaction via telephone. The Client’s EBT

Program account shall be debited and the Retailer's

applicable account shall be credited with respect to such

Texas EBT Network Transaction, at the time the Texas

EBT System processes a complete and properly prepared

and submitted Manual Voucher with respect to such Texas

EBT Network Transaction. If the Manual Voucher is

properly submitted, but is not complete or properly

prepared, the EBT Provider or the Texas EBT System will

not process the Manual Voucher until the missing and/or

correct information with respect to the Texas EBT Network

Transaction is received (in accordance with Section 3.4.5).

3.4.9. Standing Orders

With respect to Manual Voucher Transactions, which

involve home delivery to the Client, house-to-house trade

routes which operate on standing orders from Clients or

similar circumstances, and for which the Retailer is unable

to contact the EBT Provider Merchant Help Desk by

telephone at the time a Client seeks to perform the

Transaction, such Retailer may provide the purchase items

to the client and obtain the manual Voucher Authorization

number at a later time, at the retailers own risk.

Subject to Section 2.11, if Retailer fails to obtain a Voucher

Authorization number from the EBT Provider’s Merchant

Help Desk at or prior to the time of processing the Manual

Voucher Transaction, the Retailer shall bear the risk of

there being insufficient funds in the applicable client

account at the time the Transaction is submitted to the EBT

Provider or the Texas EBT System.

3.4.10. Re-presentation

The Texas EBT System does not allow the re-presentment

of a manual voucher for payment.

3.4.11. State Liability

The State shall be liable (i.e., authorize crediting of the

Retailer's account) only with respect to those Manual

Voucher Transactions performed in accordance with the

provisions set forth in the Federal EBT regulations at 7

CFR § 274.3(c)(4) and the processing standards specified

by the State of Texas and these Operating Rules.

3.4.12. EBT Provider’s Liability

The EBT Provider shall be liable to Retailers with respect

to those Manual Voucher Transactions performed in

accordance with the terms and conditions of the Retailer

agreement, these Operating Rules, State standards and

applicable Federal EBT regulations.



15

3.4.13. Additional Procedures

In addition to those set forth in these Operating Rules,

Retailers shall follow any procedural instructions not in

conflict with these Operating Rules with respect to the

processing of Manual Voucher Transactions provided to

Retailers by the EBT Provider. Such instructions will be

provided to Retailers in Retailer training materials.

3.4.14. Dispute Resolution

The Texas EBT System does not allow disputes for Manual

Voucher Transactions.

3.4.15. Electronic Submission of Manual Vouchers

The state-supported retailer TPP has the capability to

electronically settle a Texas EBT Network Manual

Voucher Transaction via the POS device or the EBT

Retailer website (www.ebtEDGE.com). The Retailer may

opt for this method of Manual Voucher settlement.

Voucher Authorization via the EBT Provider’s Merchant

Help Desk must be obtained for each electronically

submitted Manual Voucher Transaction. The Voucher

Authorization number must be included in the electronic

submission of the Manual Voucher.

3.4.16. Processing Rules for Electronic Submission of Manual Vouchers

1. Fill out Manual Voucher as specified in Section 3.4.5.

2. Obtain Voucher Authorization and record the number

on Manual Voucher as specified in Sections 3.4.5 and

3.4.6 (subject, however, to Section 2.11).

3. Give Client a copy as specified in Section 3.4.7.

4. Enter the information from the Manual Voucher into

the Retailer's POS device or the voucher can be cleared

by entering the Manual Voucher information on the

Merchant Web Portal in accordance with procedures.

(This can occur after the Client leaves the premises.)

5. If the Manual Voucher Electronic Transaction is

accepted, settlement for the transaction will be made by

the Texas EBT System in that day's batch, as of the

time of the electronic submission of the transaction.

(e.g., if the Voucher Authorization occurred in

Retailer's Banking Business Day 1 and the electronic

submission was on Day 2, settlement of the transaction

will occur on the same Banking Business Day as other

Day 2 transactions).


declined, an error has occurred. The Retailer should

verify that the information submitted is correct or

contact the EBT Provider’s Merchant Help Desk.

7. The Retailer must retain a copy of the Manual Voucher

for a period of five (5) months.


Requirements for Retailers Using Non-State-Supplied Terminals Page Version 7.0 May 2017

16

4. Requirements for Non-State-Supported Retailers

4.1. Introduction

This Section describes the requirements specific to

Retailers who operate their own POS Terminals or have

POS Terminals operated on their behalf by TPPs or a sub-

processor of a TPP. These requirements are in addition to

those defined elsewhere in these Operating Rules, which

are applicable to all Retailers.

4.2. POS Terminal Equipment

Terminal equipment may be provided by the Retailer or a

TPP or a sub-processor of a TPP contracted by the Retailer.

In any such case, the equipment must meet the standards in

Section 4. In addition, Retailers ensure they provide

adequate EBT service, defined as having EBT equipment at

a sufficient number of registers to provide comparable

check-out service to SNAP and non-SNAP customers.

4.2.1. Unique Terminal ID

Each EBT transaction must contain a unique terminal

identifier. When a Retailer location has multiple POS

terminals at a single location, each terminal must contain a

unique terminal identifier. Retailers are not permitted to

use the same terminal at multiple locations.

4.2.2. Keyboard

If used for PIN entry, the alphanumeric keyboard layout

must be in accordance with ISO standards, and must have

alphanumeric keyboards in the following standard format:

0 – None 5 – JKL

1 – QZ 6 – MNO

2 – ABC 7 – PRS

3 – DEF 8 – TUV

4 – GHI 9 – WXY

4.2.3. Magnetic Stripe Reader

An operating magnetic stripe reader shall be an integrated

part, or a separate module, of every POS Terminal system.

4.2.4. PIN Functionality

1. Requirements for PIN Pad--An operating PIN pad

shall be an integrated part, or a separate but cable

connected module, of every POS Terminal system.

2. PIN Pad Keyboard--The PIN pad keyboard shall be

alphanumeric, and its layout shall be in accordance

with ISO standards with key assignments as shown in

Section 4.2.2.

3. PIN Handling Capability--Any POS Terminal/PIN pad

designated by the Retailer for the Texas EBT System

must be capable of accepting a four digit/character

alphanumeric PIN.

4.2.5. PIN Security Implementation

The confidentiality of the Client's PIN must be protected by

conformance to the rules below:

1. PINs may never be displayed, transmitted, or stored in

non-encrypted form within or between POS Terminals,

Equipment, TPPs' systems and/or the Texas EBT

System.

2. The PIN entered by the client must be encrypted at the

point of entry.

3. The Triple Data Encryption Standard (TDES), which

uses the Data Encryption Algorithm (DEA), is the

preferred standard but other encryption methodologies,

e.g., Unique Key Per Transaction (UKPT), will be

evaluated by the EBT Provider upon the written request

of a Retailer. Such methodologies may only be used if

approved by the EBT Provider.

4.2.6. Receipt Printer

A printer must provide a receipt for all approved Texas

EBT Network Transactions, which receipt must include

transaction data as detailed in Section 7.2.

4.3. Retailer Interface System

4.3.1. Requirement to Operate

Each Retailer shall cause to be operated a Retailer interface

system that meets the minimum performance standards



17

contained in Section 4.3.2., and that processes Texas EBT

Network Transactions as required by Sections 6 and 7 of

these Operating Rules and in accordance with the Texas

EBT Processor Interface Specifications.

4.3.2. Performance Requirements

A Retailer’s TPP must not have average downtime,

including scheduled downtime, exceeding 0.3% during any

calendar month.

1. The measured hours are whenever any EBT-authorized

store being serviced by the Retailer’s TPP is open for

customer business.

2. Downtime caused by communications problems in

links provided by the EBT Provider and/or other

providers outside the scope of the Retailer’s or TPP’s

control are not counted as system downtime for this

purpose.

3. The EBT Provider may determine downtime on the

basis of both administrative information logged by data

center operations personnel, and as logged by the Texas

EBT System.

4. Failure to meet this performance standard may subject

the Retailer to suspension of authorization to accept

Texas EBT Network Transactions.

4.4. Responsibility for Processing Compliance

The Retailer shall take such actions as are reasonably

required to ensure that its TPPs and other transaction-

handling parties are in compliance with the requirements of

these Operating Rules. TPPs that are connected directly to

the Texas EBT System are certified by the EBT Provider,

but other TPPs may handle Texas EBT Network

Transactions for Retailers, and they must also meet all the

standards and follow all the applicable rules in the

Operating Rules. All message flows and terminal

operations by TPPs must be certified by successfully

completing the EBT Provider’s Certification Test prior to

being permitted to interface with the Texas EBT System,

and may be required to be re-certified at the EBT

Provider’s or HHSC’s sole discretion.

The Retailer must insure that all TPPs utilized by the

Retailer for Texas EBT Network Transaction processing

will promptly notify the EBT Provider of any changes in

their systems that may affect the processing of Texas EBT

Network Transactions.

4.5. Liquidated Damages ("LDs")

If, during a calendar month, Texas EBT Network

Transactions processed via Retailer owned or provided

POS Terminals cannot be processed within the "Speeds for

LD Purposes", as defined below, as a result of such

Retailer's system or equipment, then with respect to each

such month (a "Failure Month"), other than the single

Failure Month that immediately follows a month during

which Texas EBT Network Transactions processed via

Retailer owned or provided POS Terminals are processed

within the Speeds for LD Purposes, the EBT Provider may

assess the Retailer liquidated damages up to the amount

that the State assesses its EBT Provider(s) in connection

with such Failure Month, but in no event more than

$20,000. Under no circumstances may the EBT Provider

assess liquidated damages against a Retailer without the

State assessing liquidated damages against the EBT

Provider.

To the extent such Failure Month was due partially but not

entirely to Retailer's system or equipment, the EBT

Provider shall assess liquidated damages in proportion to

Retailer's responsibility for the Failure Month. In the event

Retailer disagrees with such apportionment, such

disagreement shall be resolved in accordance with the

dispute resolution procedure set forth in Section 13.2,

except that the EBT Provider’s assessment of liquidated

damages shall be considered a determination by the EBT

Provider under Section 13.2.3, and the affected Retailer

may proceed immediately under Section 13.2.4.

Retailer may choose the better performance of the current

month or the prior two months for the purpose of meeting

this downtime standard.

"Speeds for LD Purposes" shall mean the following Texas

EBT Network Transaction processing response time

(measured as described below):

1. For leased line systems, 98 percent of Texas EBT

Network Transactions shall be processed within 10

seconds or less and 99 percent of all Texas EBT


seconds; and

2. For dial-up systems, 95 percent of Texas EBT Network

Transactions shall be processed within 15 seconds or

less and 98 percent of all EBT Program Transactions



18

shall be processed within 20 seconds.

Processing response time shall be measured at the POS

terminal from the time the "Enter" or "Send" key is pressed

to the receipt and display of authorization or disapproval

information.

4.6 Offline Manual Voucher Transactions

A Retailer may process offline (manual) SNAP

redemptions when it is able to contact the EBT Provider’s

Merchant Help Desk by telephone. A Retailer may, at its

option, process offline (manual) TANF Cash Program cash-

back or cash withdrawal redemptions only in the event of

a disaster or an EBT system failure and when it is able to

contact the EBT Provider’s Merchant Help Desk by

telephone. Subject to Section 2.11, if authorization cannot

be obtained before or at the time of purchase, a Retailer

assumes the risk of insufficient benefits being available in

the client’s account.

However, subject to Federal regulations, Retailers with

monthly average SNAP benefit redemptions below $100

and who were FNS authorized before March 21, 2014, may

continue to process offline Manual Voucher Texas EBT

transactions only if they were processing Texas EBT

Program Transactions exclusively by Manual Vouchers on

or before March 21, 2014.

Vouchers must be settled within fifteen (15) calendar days

of the date of the transaction. Vouchers that are not settled

within fifteen (15) calendar days will not be accepted for

reimbursement by the Texas EBT System.

4.6.1. Offline Transaction Capability

If a Retailer uses Manual Vouchers, the Retailer must

provide Manual Voucher services for completion of a

Texas EBT Network Transaction using the Client's Lone

Star Card when the TPP’s system, the Texas EBT System,

the POS Terminal, or the PIN pad is inoperative. Manual

Vouchers must be submitted for settlement via mail or via

electronic transmission (Section 4.6). When Manual

Voucher Authorizations are not available at the EBT

Provider’s Merchant Help Desk, the Stand-In processing

option may be available (see Section 2.11).

4.6.2. Manual Voucher Settlement Submission Rules

The Retailer must submit Manual Vouchers for settlement

in one of the following ways:

1. the Retailer may enter the Manual Vouchers into a POS

Terminal at the Retailer location and submit them as

Electronic Vouchers (in the form of an Advice

Transaction); or

2. the Retailer may deliver copies of Manual Vouchers to

their designated TPP who will enter the Texas EBT

Network Transactions and submit them as Electronic

Vouchers (in the form of an Advice Transaction).

It is the responsibility of the retailer to ensure delivery to

the appropriate location has occurred timely and the

voucher has been processed.

4.6.3. Manual Voucher Use Requirements

If electronic transaction processing via a POS is not

available, for the reasons described in Section 4.6.1, and

the EBT Provider’s Merchant Help Desk is able to provide

transaction authorizations to the Retailer via telephone, the

Retailer may process SNAP and/or TANF "cash

withdrawal" and/or "cash purchase" Manual Voucher

Transactions.

4.6.4. Limits on Vouchers

The Texas EBT system does not impose any dollar limits

on authorized manual vouchers, other than the current

balance available in the account.

4.6.5. Voucher Contents

Subject to Section 2.11, Manual Voucher Transactions

effected without obtaining a Voucher Authorization

number from the EBT Provider’s Merchant Help Desk shall

be "at the risk of the Retailer." Neither the EBT Provider

nor the State shall be liable to Retailers with respect to such

Manual Voucher Transactions if insufficient funds exist in

the Clients' applicable EBT Program benefit accounts at the

time the Manual Voucher is presented for processing and

payment. Manual Vouchers are either accepted in total or

rejected in total for payment. No partial payments are

made for Manual Vouchers.

With respect to each Manual Voucher Transaction,

Retailers shall legibly and properly complete the Manual

Voucher, including the full names of the Client and sales

clerk’s initials, the Client's PAN as printed on the Client's

Lone Star Card, the total purchase amount, the date of the

transaction, Voucher Authorization number, and FNS



19

Number for SNAP transactions (if Retailer is authorized by

FNS)/. Retailers must also obtain the Client’s signature on

all Manual Vouchers.

4.6.6. Voucher Authorization

Prior to completing any Manual Voucher Transaction, the

Retailer shall fill out the Manual Voucher as set forth in

Section 4.6.5 and (subject to Section 2.11) obtain a

Voucher Authorization (including a Voucher Authorization

number) for the amount of the Texas EBT Network

Transaction via telephone from the EBT Provider’s

Merchant Help Desk.

4.6.7. Client Copy


copy of the Manual Voucher executed in accordance with

Section 4.6.5.

4.6.8. Voucher Submission

Manual Voucher Transactions must be submitted (via mail

delivery or electronically as an Electronic Voucher) to the

Retailer’s TPP for processing so that the Electronic

Voucher transaction is received by the EBT Provider within

fifteen (15) calendar days of the date of the transaction.

If the Manual Voucher is submitted by mail, the original

Manual Voucher (and not a copy) must be submitted to the

Retailer’s TPP for payment. Manual Vouchers must be

complete and properly prepared (in accordance with

Section 4.6.5) in order for the TPP to submit the Electronic

Voucher transaction to the EBT Provider for settlement.

Corrections and re-submissions of Manual Vouchers must

occur within the 15 calendar days of the transaction—the

amount of time allowed for Manual Voucher submission.

A Retailer should contact their TPP for instructions and

guidelines on submitting Manual Vouchers.

The Client's EBT Program accounts shall be encumbered in

connection with a Manual Voucher Transaction at the time

the EBT Provider’s Merchant Help Desk issues to the

Retailer a Voucher Authorization number for the amount of

the Texas EBT Network Transaction via telephone. The

Client’s EBT Program account shall be debited and the

Retailer's applicable account shall be credited with respect

to such Texas EBT Network Transaction, at the time the

Texas EBT System processes a complete and properly

prepared and submitted Manual Voucher with respect to

such Texas EBT Network Transaction. If the Manual

Voucher is properly submitted, but is not complete or

properly prepared, the TPP or the Texas EBT System will

not process the Manual Voucher until the missing and/or

correct information with respect to the Texas EBT Network

Transaction is received (in accordance with Section 4.6.5).

4.6.9. Standing Orders

Subject to Federal regulations, this section on standing

orders applies only to Retailers with monthly average

SNAP benefit redemptions below $100 who were

authorized before March 21, 2014, and were processing

Texas EBT Program Transactions exclusively by Manual

Vouchers on or before March 21, 2014.

With respect to Manual Voucher Transactions, which

involve home delivery to the Client, house-to-house trade

routes which operate on standing orders from Clients or

similar circumstances, and for which the Retailer is unable

to contact the EBT Provider Merchant Help Desk by

telephone at the time a Client seeks to perform the

Transaction, such Retailer may provide the purchase items

to the client and obtain the manual Voucher Authorization

number at a later time, at the Retailers own risk.

Subject to Section 2.11, if Retailer fails to obtain a Voucher

Authorization number from the EBT Provider’s Merchant

Help Desk at or prior to the time of processing the Manual

Voucher Transaction, the Retailer shall bear the risk of

there being insufficient funds in the applicable client

account at the time the Transaction is submitted to the EBT

Provider.

4.6.10. Re-presentation

The Texas EBT System does not allow the re-presentment

of a manual voucher for payment.

4.6.11. State Liability

The State shall be liable (i.e., authorize crediting of the

Retailer's account) only with respect to those Manual

Voucher Transactions performed in accordance with the

provisions set forth in the Federal EBT regulations at 7

CFR § 274.3(c)(4) and the processing standards specified

by the State of Texas and these Operating Rules.

4.6.12. EBT Provider’s Liability



20

The EBT Provider shall be liable to Retailers with respect

to those Manual Voucher Transactions performed in

accordance with the terms and conditions of the Retailer

agreement, these Operating Rules, State standards and

applicable Federal EBT regulations.

4.6.13. Additional Procedures

In addition to those set forth in these Operating Rules,

Retailers shall follow any procedural instructions not in

conflict with these Operating Rules with respect to the

processing of Manual Voucher Transactions provided to

Retailers by their TPP.

4.6.14. Dispute Resolution

The Texas EBT System does not allow disputes for Manual

Voucher Transactions.

4.6.15. Electronic Submission of Manual Vouchers

If the Retailer's system, or that of its designated TPP, has

the capability to electronically settle a Texas EBT Network

Manual Voucher Transaction, the Retailer and/or TPP may

opt for this method of Manual Voucher settlement.

Voucher Authorization via the EBT Provider Merchant

Help Desk must be obtained for each electronically

submitted Manual Voucher Transaction. The Voucher

Authorization number must be included in the electronic

submission of the Manual Voucher.

4.6.16. Processing Rules for Electronic Submission of Manual Vouchers

1. Fill out Manual Voucher as specified in Section 4.6.5.

2. Obtain Voucher Authorization and record number on

Manual Voucher as specified in Sections 4.6.5 and

4.6.6 (subject, however, to Section 2.11).

3. Give Client a copy as specified in Section 4.6.7.

4. Enter the information from the Manual Voucher into

the Retailer and/or TPP system in accordance with

procedures for the specific system. (This can occur

after the Client leaves the premises.)


accepted, settlement for the transaction will be made by

the Texas EBT System in that day's batch, as of the

time of the electronic submission of the transaction.

(e.g., if the Voucher Authorization occurred in

Retailer's Banking Business Day 1 and the electronic

submission was on Day 2, settlement of the transaction

will occur on the same Banking Business Day as other

Day 2 transactions).


declined, an error has occurred. The Retailer should

verify that the information submitted is correct or

contact their designated TPP.

7. The Retailer must retain a copy of the Manual Voucher

for a period of five (5) months.


Requirements for Processors Page Version 7.0 May 2017

21

5. Requirements for Third Party Processors

5.1. Introduction

This Section describes the requirements specific to TPPs.

These requirements are in addition to those defined

elsewhere in these Operating Rules, which are applicable to

all participants in the Texas EBT Program.

5.2. Interface Standards

5.2.1. Message Formats

The EBT Provider maintains all message formats in its

Texas EBT Processor Interface Specifications document,

available upon request from the EBT Provider. TPPs are

required to meet all requirements and conditions outlined in

the EBT Processor Interface Specifications. In cases where

there are conflicts between the Texas EBT Processor

Interface Specification and these Operating Rules, these

Operating Rules will prevail.

5.2.2. Message Flows

The message flow and the message protocols are defined in

the Texas EBT Processor Interface Specification.

5.2.3. Date-Related Processing

1. TPPs must warrant that their products operate

accurately, in the manner in which it was intended as it

relates to the date related operations when given a valid

date containing century, year, month, and day.

2. For the purpose of this section, the following

definitions shall apply:

Products: include but are not limited to any supplied or

supported hardware, software, firmware and/or micro code.

Accurately: refers to correct processing according to the

following:

calculations must execute using dates with a

four digit year;

functionality (e.g., online and batch)

including but not limited to entry, inquiry,

maintenance and update must support four

digit year processing;

interfaces and reports must support four

digit year processing;

leap year must be calculated correctly; and

correct results in forward and backward data

calculation spanning century boundaries

must be provided, including the conversion

of previous years currently stored as two

digits.

3. Valid Date: a date which contains a two digit month, a

two digit day and a four digit year.

4. Extraordinary Action: any action outside the normal

documented processing steps identified in the product’s

reference manual.

5.3. Testing

HHSC and/or EBT Provider may not elect to stop

production of Texas EBT Network Transaction processing

to accomplish testing of EBT Provider's system.

5.3.1. General Testing Requirements

1. The EBT Provider and HHSC determine the minimum

testing requirement and acceptance criteria for the

certification of TPPs.

2. The HHSC or its EBT Provider must have certified the

TPP's data communications prior to any EBT Program

Transaction testing. Once certified for communications

by the HHSC or its EBT Provider, the TPP will be

connected to the production network, but only

permitted to connect with a test machine.

3. All testing is performed on a special test machine with

transaction simulators and special monitoring facilities.

The HHSC or its EBT Provider will supply test scripts,

test cards and an EBT Processor Testing guide. HHSC

or its EBT Provider staff will schedule and monitor all

testing.

4. No TPP will be allowed to begin production of Texas

EBT Network Transaction processing prior to meeting

the minimum test requirements.

5. The HHSC or its EBT Provider may require TPPs to be

re-certified in the event of more than one "Failure

Month" (as defined in Section 4.5) with respect to such

TPP and in the event material changes are made to

TPPs' systems. TPPs shall notify the HHSC or its EBT

Provider as soon as possible prior to the

implementation of any changes in their systems that

may affect the processing of Texas EBT Network

Transactions, and shall include with such notice(s) a

schedule describing such changes in reasonable detail



22

and specifying the date(s) of such changes.

5.3.2. Testing Schedules and Fees

Testing and any applicable fees are coordinated through

HHSC.

5.4. Electronic Submission of Voucher Authorization Advices

The EBT Provider and/or HHSC shall be liable to the

Retailer for any Manual Voucher Transaction properly

authorized pursuant to Voucher Authorization procedures

and properly submitted by that Retailer or TPP to the Texas

EBT System as Electronic Vouchers (see Section 3.4.15

and 4.6.15). The Texas EBT System shall settle for the full

amount of such Electronic Voucher Advices. Subject to

Section 2.11, Manual Vouchers and Electronic Voucher

Advices must contain the proper Voucher Authorization

number, as given by the EBT Provider’s Merchant Help

Desk at the time of authorization.

5.5. Performance Standards

Each TPP's system must perform at speeds fast enough to

permit the Texas EBT Network Transactions processed via

such system to be processed within the time limits set forth

in FNS regulations 7 CFR 274.8(b)(1)(i), as follows:

1. for leased line systems, 98 percent of EBT Transactions

shall be processed within 10 seconds or less and all

EBT Program Transactions shall be processed within

15 seconds; and

2. for dial-up systems, 95 percent of EBT Transactions

shall be processed within 15 seconds or less and all

EBT Transactions shall be processed within 20

seconds.




information.

5.5.1. Performance Requirements

A Retailer’s TPP must not have average downtime,

including scheduled downtime, exceeding 0.3% during any

calendar month.

1. The measured hours are whenever any EBT-authorized

store being serviced by the Retailer’s TPP is open for

customer business.

2. Downtime caused by communications problems in links

provided by the EBT Provider and/or other providers

outside the scope of the Retailer’s or TPP’s control are

not counted as system downtime for this purpose.

3. The EBT Provider may determine downtime on the

basis of both administrative information logged by data

center operations personnel, and as logged by the Texas

EBT System.

5.6. Liquidated Damages ("LDs")

If, during a calendar month, Texas EBT Network

Transactions processed via a TPP's system cannot be

processed within the "Speeds for LD Purposes", as defined

below, on account of such TPP's system or equipment, then

with respect to each such month (a "Failure Month"), other

than the single Failure Month that immediately follows a

month during which Texas EBT Network Transactions

processed via a TPP's system are processed within the

Speeds for LD Purposes, the EBT Provider may assess the

TPP liquidated damages up to the amount the State assesses

its EBT Provider(s) in connection with such Failure Month,

but in no event more than $20,000.

To the extent such Failure Month was due partially but not

entirely to TPP's system or equipment, the EBT Provider

shall assess liquidated damages in proportion to the TPP's

responsibility in the Failure Month. In the event TPP

disagrees with such apportionment, such disagreement shall

be resolved in accordance with the dispute resolution

procedure set forth in Section 13.2, except that the EBT

Providers’ assessment of liquidated damages shall be

considered a determination by the EBT Provider under

Section 13.2.3, and the affected TPP may proceed

immediately under Section 13.2.4

“Speeds for LD Purposes" shall mean the following Texas

EBT Network Transaction processing response time

(measured as described above):

1. for leased line systems, 98 percent of Texas EBT


seconds or less and 99 percent of all Texas EBT


seconds; and

2. for dial-up systems, 95 percent of Texas EBT Network

Transactions shall be processed within 15 seconds or

less and 98 percent of all Texas EBT Network



23

Transactions shall be processed within 20 seconds.




information.

5.7. Provisions Regarding Liability

5.7.1. General

1. The EBT Provider and/or HHSC shall be liable for

each Texas EBT Network Transaction authorized by

them, and shall settle for the full amount of such

transaction, subject to the other provisions of these

Operating Rules (e.g., Sections 2.10.4 and 2.10.5)


responsible or liable for any Losses to any party arising

out of Texas EBT Network Transactions with respect to

which Retailer's TPP transmits an approval to a POS

Terminal of Retailer after receiving a rejection from the

Texas EBT System.


responsible or liable to any party for any Texas EBT

Network Transactions until such Texas EBT Network

Transaction has been electronically accepted by the

Texas EBT System. Retailer and Retailer's TPP will

indemnify and hold HHSC, the EBT Provider, and their

parent corporations, affiliates, employees, contractors

and agents harmless from and against all Losses

incurred as a result of or incident to Texas EBT

Network Transactions processed via a TPP and

erroneously processed due to the negligence or willful

misconduct of the Retailer and/or the Retailer's TPP.

5.7.2. Limitation on Liability

TPP shall not be responsible or liable with respect to any

Texas EBT Network Transaction (or any Losses incurred in

connection therewith) which is shown to be incorrectly or

fraudulently initiated or completed directly as a result of

actions of the EBT Provider or omissions for which the

EBT Provider is specifically responsible under a TPP

agreement or these Operating Rules.

The EBT Provider’s and/or HHSC’s maximum total

liability with respect to any Texas EBT Network

Transaction (or any Losses incurred in connection

therewith) which is shown to be incorrectly or fraudulently

initiated or completed directly as a result of actions of the

EBT Provider and/or HHSC or omissions for which the

EBT Provider is specifically responsible under a Retailer

agreement, TPP agreement or these Operating Rules, shall

be limited to the amount of the Texas EBT Network

Transaction.

5.7.3. Manual Entry of PAN

After settlement, the EBT Provider and/or HHSC shall

have no further responsibility or liability for any Texas

EBT Network Transaction involving manual PAN entry,

and acceptance and settlement thereof by the EBT

Provider, where the PAN entry is subsequently determined

to have been accomplished through fraud and/or

unauthorized use of a PIN. Retailer will indemnify and

hold HHSC, the EBT Provider, and their parent

corporations, affiliates, employees, contractors and agents

harmless from and against all Losses incurred as a result of

or incident to all such Texas EBT Network Transactions

where the fraud and/or unauthorized PIN use is on the part

of the Retailer, Retailer's employees or agents.

5.7.4. Electronic Advice Transactions

Neither the EBT Provider nor the State shall be responsible

or liable to any party for any Texas EBT Network

Transaction effected using Voucher Authorization and

Electronic Voucher settlement capabilities of the TPP's

system, and which is subsequently rejected by the Texas

EBT System upon electronic submission on account of

Retailer's and/or Retailer TPP's failure to follow the

procedures set forth in Section 3.4 and 4.6.

5.8. Phone Lines and Calls

5.8.1. Communication Lines

TPP is responsible for procuring and arranging for

installation of telecommunications interfaces (primary and

backup) from the TPP’s location to the Texas EBT System.

TPP is responsible for monthly charges associated with

such lines and for the management of such lines.

5.8.2. Calls

The TPP is responsible for any charges associated with the

transmission of online transaction communication calls

made directly to the Texas EBT System.


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6. EBT Provider Processing and Support Services

6.1. Introduction

This section defines services provided by the EBT Provider

and indicates whether their support is "mandatory" or

"optional" for Retailers and TPPs.

6.2. Mandatory and Optional Services -Definition

The terms "mandatory" and "optional" indicate whether a

particular service must be supported (mandatory) by all

Retailers and their TPPs or may be supported at the choice

of Retailers and their TPPs (optional). This designation is

dependent on the particular service and is indicated below.

6.3. POS Service Definitions

6.3.1. Purchase (Mandatory)

An EBT Program Transaction in which funds are debited

from a Client's benefit account and credited to a Retailer's

account in consideration for goods or services obtained

from the Retailer by the Client.

6.3.2. Return (Mandatory)

An EBT Program Transaction in which funds equivalent to,

or less than, the amount of an earlier SNAP purchase (in an

amount no greater than $200) by the Client, may be debited

from the Retailer's account and credited to the Client's

account with the Retailer’s approval. The Texas EBT

System allows for only $200 in returns, cumulative, per

calendar month, per Client.

Returns of TANF Cash Program benefit-purchased items

will be reimbursed with cash by the Retailer.

6.3.3. TANF Cash Withdrawal (Optional)

An EBT Program Transaction at a POS Terminal in which

the Client debits a TANF cash benefit account and is issued

cash equal to the amount approved.

6.3.4. Balance Inquiries at POS Terminals (Optional)

To facilitate tracking of benefit account balances, Clients

will be trained to retain their receipts and/or to call the EBT

Provider Merchant Help Desk for an account balance

inquiry. Balance inquiries at POS terminals are also

allowed.

6.3.5. POS Offline Processing (Optional)

When the electronic link between the Retailer and the

Texas EBT System is temporarily not operational, the

Retailer may process offline by using Offline Manual

Vouchers. The Manual Vouchers are submitted to the

Texas EBT System electronically in the form of an Advice

Transaction or submitted on paper to the EBT Provider for

processing.

6.4. Other Transaction Definitions

6.4.1. Reversals (Mandatory)

A “Reversal” is a type of Transaction that is initiated by a

POS in the Texas EBT System to correct a variety of

system communication issues. A reversal may be initiated

by a POS device to “cancel” the most recent Transaction

from the device. This would typically be necessary when

no authorization to complete a Transaction was received by

the POS Terminal from the EBT system within a

predetermined period of time (usually around 30 seconds).

A Reversal Transaction must include enough information

to allow it to be unambiguously matched with the

Transaction that is being reversed.

6.4.2. Key-entered Transactions (Mandatory)

A key-entered transaction is completed by entering the card

account information into the terminal. This is used in the

case that the card cannot be read by the attached card-

reader.

6.4.3. Settlement / Closeout Activities (Mandatory)

An EBT Program Transaction at a POS Terminal in which

the Retailer can generate periodic transaction summary

reports and meeting settlement requirements (if applicable).

6.4.4. Void Last Transaction (Mandatory)

Allows the Retailer to void the last successful transaction

performed on the terminal.


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7. Transaction Processing Rules

7.1. General Rules

The following rules apply to all Client-initiated Texas EBT

Network Transactions.

7.1.1. Requirement for Card

All Client-initiated Texas EBT Network Transactions must

be initiated with the physical use of a Lone Star Card.

7.1.2. Primary Account Number (PAN)

All Client Texas EBT Network Transactions must include

the Client PAN. The Client PAN must always be read

electronically from the magnetic stripe on the Lone Star

Card by the use of the POS Terminal’s magnetic stripe

reader. Manual entry of the PAN is only allowed as a

fallback measure for Texas EBT Network Transactions.

Retailers and/or the Retailer’s TPP must indicate the

method by which the PAN is entered into the POS device

(either via swipe or manual entry). Manual entry of the

PAN is governed by Section 2.10.3.

7.1.3. Personal Identification Number (PIN)

With only two exceptions, all Client Texas EBT

Network Transactions must include a PIN. The

exceptions are:

1. transactions processed with a Manual Voucher; and

2. POS Advice transactions resulting from Electronic

Vouchers.

7.1.4. Partial Approvals

The Texas EBT System will either approve or deny the

total funds transfer request it receives for TANF Cash

Withdrawal and Purchase EBT Program Transactions. No

approvals for partial amounts are permitted for these

Transactions.

7.1.5. Store and Forward of Reversals and Advices

In accordance with the provisions set forth under SNAP

Regulation 7 CFR 274.8(e), the Texas EBT System will

allow Retailers, at the Retailer’s own choice and liability,

to perform Store-and-Forward Transactions when the EBT

system cannot be accessed for any reason. The Retailer

would be able to forward the Transaction to the host one

time within 24 hours of when the system again becomes

available. Should the 24-hour window cross into the

beginning of a new benefit issuance period, Retailers may

draw against all available benefits in the account.

In instances where there are insufficient funds to authorize

an otherwise approvable Store-and-Forward Transaction,

Retailers are allowed to collect the balance remaining in the

Client's account.

7.2. Receipt Requirements

7.2.1. Online Transactions

At the time of any Client-initiated online Texas EBT

Network Transaction involving a movement of funds

among participating Retailers and/or TPPs, a Texas EBT

Network Transaction receipt shall be made available to

each Client. This receipt shall comply fully with all

applicable state and federal laws and regulations such as

(but not limited to) Regulation E (12 CFR § 205) and

SNAP Regulation 7 CFR 274.7(d)(3) and shall contain the

following mandatory information:

1. the store location and the name of the Retailer

providing the goods, services, or money to the clients;

2. the Texas EBT Network Transaction date;

3. the type of Texas EBT Network Transaction (e.g.,

SNAP, TANF Cash);

4. a number or code that uniquely identifies the Client

initiating the Texas EBT Network Transaction, such as

the last four digits of the Client’s PAN (the entire PAN

is not to be used);

5. the amount of the Texas EBT Network Transaction;

6. the balance remaining in the account accessed for the

Texas EBT Network Transaction;

7. an employee number or other unique identifier for the

employee operating the POS Terminal at which the

Texas EBT Network Transaction was initiated; and,

8. the POS Terminal location number or, at the Retailer's

option, one of the other required location descriptions

specified by applicable federal and state law and

regulation.


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26

The following information is recommended on all POS

receipts:

1. a transaction trace number; and

2. the balance remaining in other EBT accounts.

Language requiring Clients to pay the transaction amount

or authorizing the transfer of the Transaction amount must

not be printed on POS receipts. Signature lines must not be

printed on the POS receipts and Retailers shall neither

request nor require Clients to sign POS receipts in order to

receive goods, services and/or TANF cash. In addition,

Retailers must not charge sales taxes or Transaction fees

for any SNAP benefit purchases.

NOTE:

IMMEDIATELY INVESTIGATE ANY POS

TRANSACTION IF A POS RECEIPT DOES NOT HAVE

THE ABOVE REQUIRED ITEMS SINCE THIS MAY BE

AN INDICATION OF TAMPERING OR OTHER

PROBLEM.

A POS RECEIPT WITH “TRAINING MODE”

INDICATES A TRAINING MODE TRANSACTION

ONLY. RETAILERS ARE RESPONSIBLE FOR ANY

GOODS DISPENSED DURING POS TRAINING MODE

OPERATIONS.

The requirements of this Section 7.2.1 shall apply only to

Texas EBT Network Transactions involving the transfer of

funds.

Retailers must provide information, either on a receipt or

otherwise at the POS Terminal, for each declined Texas

EBT Network Transaction, which information must

include, at a minimum, the information transmitted to the

Retailer in accordance with the Texas EBT Network

Interface Specifications.

Retailers are required to transmit Texas EBT Network

Transaction records to the Texas EBT System in

accordance with the EBT Processor Interface Specifications

and in compliance with all applicable federal and state laws

and regulations.

Subject to any contrary provisions in Section 10, Retailers

are not permitted to add a Texas EBT Network Transaction

fee to the amount of the Transaction.

7.2.2. Benefit Draft Transactions – Manual and Electronic Vouchers


copy of the Manual Voucher. (Every Electronic Voucher

must originate with a Manual Voucher.) The receipt shall

fully comply with all applicable federal, state and local

laws, rules and regulations and contain the information

required in Section 3.4 and 4.6.

7.3. POS Transactions

7.3.1. Payee Identification

The electronic message transmitted by the Retailer must

contain in the payee field of the message the Retailer

Identification Number (identifying the retailer location) and

the unique Terminal Identification Code of the POS

Terminal on which the transaction was processed.

7.3.2. Electronic Voucher Submission Period

The period within which the Retailer or TPP may submit

the Electronic Voucher (Advice) transaction to the Texas

EBT System shall not exceed fifteen (15) calendar days

from the date of the original Texas EBT Network

Transaction.

7.3.3. Transaction Limits

In accordance with the provisions set forth in the Federal

EBT regulations at 7 CFR 274.7(c) no minimum dollar

amount per transaction nor maximum limit on the number

of transactions shall be established. In addition, no

transaction fees shall be imposed on SNAP households

utilizing the EBT system to access their benefits.


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8. Settlement Procedure

8.1. General

Settlement will be performed each Banking Business Day

at the settlement time established by the Texas EBT

System. Entries to the Retailer’s or TPP's settlement

account may include:

Daily (Net) Food Totals (total, less returns)

Daily (Net) Cash Totals (total, less voids)

Manual Voucher Totals

Adjustment Debit Totals

Adjustment Credit Totals

In case of settlement discrepancies between the Texas EBT

System and the Retailer and/or TPP, settlement will be for

the Texas EBT System-reported amounts or, in the case of

Retailers that interface with the Texas EBT System through

a regional network (e.g., PULSE); settlement will be for the

regional network's reported amounts.

8.2. Daily EBT System Cut-Off Time

To determine the amount due each Retailer or TPP for EBT

benefit redemption, Texas EBT System will cut-off its

settlement day at 6:00 p.m. Central Time (the "EBT System

Cut-Off Time"), regardless of what time zone the

transaction was initiated. The Texas EBT System Cut-Off

Time will allow the EBT Provider the time needed to meet

deadlines established by the state and federal government

for automated draw down and by ACH for next Banking

Business Day settlement.

8.3. TPP Cut-Off

Each TPP will establish the daily time at which their

Banking Business Day ends for purposes of Texas EBT

Network Transactions (the "TPP Cut-Off Time"). TPP will

be free to select its TPP Cut-Off Time, provided however,

TPPs that interface with the Texas EBT System through a

regional network must conform to the cut-off time

established by such regional network. Based on the time

selected, the settlement funds will flow as follows:

If the TPP Cut-Off Time is on or before the Texas EBT

System Cut-Off Time reimbursement to TPP's designated

account at a financial institution will occur on the next

Banking Business Day.

If the TPP Cut-Off Time is after the Texas EBT System

Cut-Off Time, reimbursement will occur in two (2)

Banking Business Days.

If a TPP is the designated settlement point on behalf of

Retailer(s), settlement reimbursement will be given in

accordance with the contractual arrangement between the

TPP and the Retailer.

8.4. Settlement Day

ACH settlement (funds flow) will be performed only on

Banking Business Days. However, the Texas EBT System

will report daily settlement totals even if settlement does

not occur.

8.5. Settlement Accounts

Each Retailer or TPP shall maintain a settlement account

with a federally insured financial institution capable of

accepting credits and debits in the ACH format. Except

with respect to TPPs that interface with the Texas EBT

System through a regional network, the EBT Provider will

send ACH pre-notification transactions to the designated

settlement account to ensure the accuracy of the account

information. Retailer or TPP changes to settlement account

information must be resubmitted to and agreed to by the

EBT Provider at least thirty (30) days prior to any changes

to settlement account information.

8.6. Management of Settlement Accounts

Settlement accounts maintained by Retailers and/or TPPs

shall be managed by their designated financial institution

according to its usual banking procedures with respect to

such accounts.

8.7. Settlement Process

To facilitate reconciliation on each Settlement Day, the

Texas EBT System will transmit electronically to Retailer

or TPP the Settlement total records as described in Section

8.1 (except with respect to Retailers or TPPs that interface

with the Texas EBT System through a regional network).

This transmission will take place shortly after TPP Cut-Off

Time.


Settlement Procedure Page Version 7.0 May 2017

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Retailers using State-provided Equipment may retrieve

Settlement totals via a POS Terminal at Settlement time.

The different totals reflect the dollar amounts that will be

posted to the Retailer’s or TPP’s Settlement account.

8.8. Settlement Posting

After the Texas EBT System Cut-Off Time, on each

Settlement day, the EBT Provider will instruct its

Concentrator Bank to debit or credit each Settlement

account for net redemption food totals, net redemption cash

totals, Manual Vouchers and Adjustments (except with

respect to Retailers or TPPs that interface with the Texas

EBT System through a regional network). This instruction

will be performed via ACH transmission.

8.9. Settlement Reports

Except with respect to TPPs that interface with the Texas

EBT System through a regional network, reports will be

retrievable from the Texas EBT System on a next Banking

Business Day basis to assist TPPs in their reconciliation

effort. A Daily Redemption-EBT Program Transaction

Detail Report will provide net food and net cash totals,

Manual Voucher Transaction totals and adjustment totals

for Retailers and TPPs. A Reconciliation Data File,

containing the detail of all Texas EBT Network

Transactions performed and Settlement totals for the

previous day’s business will also be provided. Distribution

of the aforementioned reports and files will be made in

accordance with procedures in the EBT System Processor

Specifications. Such reports will be available for a period

of at least 180 days from Settlement date.

8.10. Discrepancies and Adjustments

Any discrepancy between a Texas EBT System Settlement

total and a TPP's total shall be communicated by the TPP

within six Banking Business Days of discovery (but no

more than ninety days from the Settlement date).

Adjustment requests will be reported in writing, with the

applicable documentation to the EBT Provider.

Discrepancies or adjustments reported after ninety days

from the Settlement date will be rejected by the EBT

Provider.

8.11. Unsettled Funds

The EBT Provider and TPPs shall adhere to FNS policy

and regulation regarding unsettled funds to Retailer

accounts.


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9. Resolution Procedure for Disputed EBT Program Transactions

9.1. Introduction

This Section describes the procedure for resolution of a

disputed Texas EBT Network Transaction between the

EBT Provider and the Retailer and/or the TPP. In addition

to the procedures discussed here, Clients have the right to

request an adjustment within ninety (90) calendar days

from the date of a System Error transaction as defined in

Section 9.2.

9.2. Terminology

For purposes of this Section, the following definitions

apply:

Chargeback – A food or TANF cash account

adjustment entry, against the Respondent's settlement

account, made as a result of the resolution of the

dispute in favor of the Initiator.

Initiator – The party initiating the process to resolve a

dispute with a Respondent.

Respondent – The second party to the dispute

identified by the Initiator.

System Error – An error resulting from a malfunction

at any point in the redemption process: from the

system host computer, to the switch, to the TPPs, to a

store's host computer or point-of-sale terminal. It

includes both Electronic Benefit Transfer (EBT)

account balance errors and EBT program transaction

errors. The error may occur after the availability date

and may result in either a debit or credit to the

household (Texas Administrative Code, Title 1, Part

15, Chapter 372, Subchapter F, Rule §372.1521).

9.3. Funds Flow

Funds flow is initiated only on resolution of the disputed

Texas EBT Network Transaction and is effected by use of

the chargeback transaction. Under the terms of these rules

a chargeback may be issued against the EBT Provider’s, the

Retailer's or the TPP's settlement account. All chargebacks

will be entered by the EBT Provider against the appropriate

account and funds will transfer.

9.4. Valid Reasons for Dispute

Disputes specific to Texas EBT Network Transactions may

only be made for system errors as defined in Section 9.2.

TPPs and Retailers should design internal procedures to

accommodate their efficient resolution within the time

frames of this procedure.

9.5. Maximum Time to Initiation

Texas EBT Network Transaction disputes must be initiated

with Respondent as soon as the Initiator knows or has

reason to know of the dispute to allow time for

investigation of the dispute and timely resolution as

outlined in Sections 9.6.1 and 9.6.2.

9.6. Dispute Resolution

All Texas EBT Network Transaction disputes must be

responded to in writing. The failure of a party to respond

to the dispute within the time specified will be treated as an

acceptance of the position of the Initiator. If the Initiator is

not satisfied with Respondent's timely response, the dispute

shall be considered a complaint, and shall be resolved in

accordance with Section 13.2.

9.6.1. Initiated by an Entity Other than the Client

The entity (i.e. Retailer, TPP, EBT Provider) discovering

the system error submits the request.

If a Retailer or TPP discovers a system error and wishes to

dispute a transaction, the Retailer or TPP contacts the EBT

Provider within 6 business days from the date of the

transaction to initiate a dispute claim for investigation.

A. If the determination is that the Client was overpaid,

the EBT Provider will make the appropriate

adjustment within 15 calendar days. Unless there are

insufficient funds available in the current month to

cover the full adjustment amount, then the dispute is

resolved by the last day of the following month.

B. If the determination is that the Client is owed funds,

the retailer or TPP has 90 days to initiate the request

and the EBT Provider will make the credit adjustment

within 10 business days of the date of notification.

The EBT Provider must notify the TANF or SNAP

household in writing of its determination of the EBT

account balance or EBT program transaction error.


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9.6.2. Initiated by the Client

If the Client discovers a system error and wishes to dispute

a transaction, the Client contacts the EBT Provider within

90 days of the date of the transaction to initiate a dispute

claim for investigation.

A. If the determination is that the Client was overpaid,

the EBT Provider will make the appropriate

adjustment within 15 calendar days.

B. If the determination is that the Client is owed funds,

the EBT Provider will make the adjustment within 10

business days of the date of notification.

The EBT Provider must notify the TANF or SNAP

household in writing of its determination of the EBT

account balance or EBT program transaction error.

9.7. Retrieval Request

If requested by the EBT Provider, the Respondent must

produce the original receipts (including, but not limited to

cash register and POS Terminal receipts) as evidence that

the Transaction occurred. The maximum time to respond is

noted in Section 9.6.

9.8. Limitation of Liability

Any liability on the part of the EBT Provider and/or HHSC

incurred in this Section 9 shall be limited to the amount of

the Texas EBT Network Transaction(s) involved.


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10. Fees

10.1. Introduction

This section details the fee structures for both Retailers and

TPPs, including fees chargeable by Retailers to Clients for

TANF cash withdrawal transactions.

10.2. Fees That May Be Charged By Retailers to Clients

10.2.1. SNAP Fees

Retailers may not charge fees or sales taxes for SNAP

benefit Transactions.

10.2.2. TANF Cash Fees

Retailers providing TANF cash only to TANF Cash

Program Clients will receive $0.50 from the EBT Provider

via daily Settlement for each of the first two TANF cash

only Transactions (no purchase included) of $50 or more in

a calendar month for each client. Retailers, at their option,

may charge the client $0.50 for each $50 or more TANF

cash only Transaction beyond the first two for a client in a

calendar month. The TANF cash only Transaction receipt

will indicate whether the TANF cash only Transaction is

one of the first two or after the first two TANF cash only

Transactions meeting the above criteria. A Retailer is not

permitted to charge a TANF Cash Program Client any other

fee in connection with the Client’s use of his TANF Cash

Program Benefit account.

Notwithstanding anything in the Retailer Agreement to the

contrary, if Retailer routinely permits commercial

customers (i.e., not recipients of SNAP or TANF benefits

covered by these rules) making a substantial purchase, to

cash checks for no fee and receive the excess of the check

amount over the purchase amount in cash (up to any

Retailer-set limit), Retailer shall treat TANF Cash Program

Benefit recipients in a consistent manner (i.e., if making a

purchase, TANF Cash Program Benefit recipients shall be

permitted to debit their TANF Cash Program Benefit

accounts and receive cash up to the Retailer-set limit, if

any, for no fee).

10.3. Allowances to Retailers

10.3.1. Supply and Telephone Reimbursement Fees

For so long as a Retailer utilizes Equipment provided by

the State, the State will provide Retailer with a credit per

Transaction for supplies and telephone line usage necessary

in connection with the use of such Equipment. Such credit

shall cover costs for required printer paper and the

processing of Texas EBT Network Transactions. A credit

per Transaction, as determined by HHSC and the EBT

Provider, will be deposited within ten (10) business days

after the end of the calendar month during which the

allowance was earned via ACH settlement to Retailer’s

bank account in a separate line item from the normal

Settlement. If the total credit amounts to less than $2.50 in

a calendar month, the credit will carry over each month

until a $2.50 minimum is met. Every six months, the EBT

Provider will settle all Transaction credits (credits totaling

less than $2.50), regardless of the amount accumulated by

the Retailer.

The credit amount per Texas EBT Network Transaction

will be reassessed as significant changes are made to the

Texas EBT Program. HHSC and the EBT Provider will

solicit comments and suggestions from the Texas EBT-

Retailer Stakeholder Group in the course of such

reassessment and will consider in good faith comments and

suggestions received.

In the event a Retailer (i) withdraws from participation in

the Texas EBT Program and/or FNS or State authorization

to participate is withdrawn or suspended, or (ii) deploys

POS Terminals other than State-supplied POS Terminals,

then credits for supplies and telephone line usage necessary

in connection with the use of POS Terminals shall not be

credited by the EBT Provider, effective with the date of the

withdrawal, suspension, or acquisition of POS Terminals

(other than those supplied by the EBT Provider).

Retailers provided with State-supplied Equipment will

receive seventy-seven hundredths of one cent ($0.0077) for

each TANF Cash and SNAP EBT Program Transaction

effected via its POS Terminals.


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10.3.2. TANF Cash Withdrawal Fees

HHSC shall reimburse Retailers fifty cents ($0.50) for each

of the first two TANF cash only (no purchase included)

Client TANF Cash Program benefit withdrawals equal to or

greater than fifty dollars ($50.00) in a calendar month (See

Section 10.2.2.).

10.3.3. Reimbursement of Fees

If Section 10.3.1, or 10.3.2 is applicable to Retailer,

Retailer’s TPP shall receive the allowance due under the

applicable Section within ten (10) business days after the

end of the calendar month during which the allowance was

earned, and Retailer shall receive such allowance from its

TPP or the EBT Provider at such time and pursuant to such

terms as set forth in Retailer’s agreement with its TPP or

the EBT Provider.

If Section 10.3.3 is applicable to Retailer, Retailer’s TPP

shall receive the allowance due under Section 10.3.3 within

the next business day after which the allowance was

earned, and Retailer shall receive such allowance from its

TPP or the EBT Provider at such time and pursuant to such

terms as set forth in Retailer’s agreement with its TPP or

the EBT Provider.


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11. Graphics Standards

11.1. Network Mark

HHSC is the owner of the Lone Star Mark, consisting of

the mark "Lone Star" and the distinctive logo. The EBT

Provider will make available to participating Retailers

camera-ready artwork for full-color reproduction of the

Lone Star Mark along with other information regarding

Lone Star signage.

11.2. Right to Use the Lone Star Mark

The protection of the Lone Star Mark is vital to everyone

involved in Lone Star, as it identifies the exact EBT

services being provided. It is an essential responsibility of

all Retailers to ensure that the nature and quality of services

identified by the Lone Star Mark be maintained in a manner

consistent with the standards established by the EBT

Provider and the State, and that the Lone Star Mark be used

only according to these Operating Rules and any other

Operating Rules published by the State.

1. The right to use the Lone Star Mark in any form or

manner will be granted only to participating Retailers

and their designated TPPs. The Lone Star Mark may

not be used in any form or manner not clearly

consistent with the Lone Star graphic standard.

2. No material displaying the Lone Star Mark shall

contain any matter that would tend to denigrate,

obscure or confuse the Mark or the nature and function

of the Texas EBT Program.

3. Any use of the Lone Star Mark by any Retailer or TPP

which is not in compliance with the EBT Graphics

Standards requires prompt remedial action by the

Retailer or TPP. If such use is not terminated and

satisfactory evidence of such termination is not given to

the EBT Provider within 10 calendar days after

receiving a notice to cease, further action will be

initiated by the EBT Provider.

4. The right to use the Lone Star Mark cannot be

sublicensed or assigned, whether by sale, consolidation,

merger, amalgamation, operation of law, or otherwise.

11.3. Responsibility for Use of Lone Star Mark

Any TPP or Retailer granted the right by the EBT Provider

to use the Lone Star Mark shall obtain no interest in the

Lone Star Mark except the right to use it in connection with

the Texas EBT Program and only in accordance with the

requirements of the EBT Graphics Standards. In addition,

with respect to the Lone Star Mark, each Retailer or TPP

shall:

1. whenever and however voluntarily incurred, bear all

costs and expense of, and full responsibility with

respect to, and all liability for, its use (and any removal

from its use) of the Lone Star Mark;

2. assume all liability and responsibility for its

compliance with all applicable federal, state, and local

laws and regulations;

3. comply strictly with all specifications, directives and

requirements concerning copyright, patent, trademark,

or service mark use, as from time to time a Retailer or

TPP may be advised of by the EBT Provider and/or

HHSC.


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34

12. General Business Terms and Conditions

12.1. Primacy of Operating Rules

12.1.1. Texas Uniform Commercial Code

1. Definition of Item – Neither the electronic messages

relating to Texas EBT Network Transactions, nor the

receipts to be provided to Clients pursuant to these

Operating Rules constitute "items" as defined in the

Texas Uniform Commercial Code.

2. Conflict with Operating Rules – In the event of any

conflict or discrepancy between the provisions of these

Operating Rules and any otherwise applicable

provision of the Texas Uniform Commercial Code,

then the parties shall be deemed to have agreed that the

Texas Uniform Commercial Code shall not apply and

that these Operating Rules shall govern.

12.1.2. Conflict with Federal and State Laws

In the event of any conflict or discrepancy between the

provisions of these Operating Rules and any otherwise

applicable provisions of federal or state laws, those laws

shall govern.

12.1.3. Conflict with Local Laws

In the event of any conflict or discrepancy between the

provisions of these Operating Rules and otherwise

applicable provision of local law, these Operating Rules

shall govern, unless state law applicable to such local law

requires otherwise.

12.1.4. Conflict with EBT Processor Interface Specifications

In the event of any conflict between the provision of these

Operating Rules, and the EBT Processor Interface

Specifications, these Operating Rules shall govern.

12.1.5. Amendments to Operating Rules

Subject to FNS approval, these Operating Rules may be

amended at any time by the EBT Provider or by HHSC.

The EBT Provider shall submit proposed amendments to

the Texas EBT Retailer Stakeholder Group and shall solicit

the Texas EBT-Retailer Stakeholder Group's comments and

suggestions thereon. The EBT Provider shall consider in

good faith comments and suggestions received.

Such amendments shall become effective as to a Retailer or

TPP upon FNS approval but no sooner than on the fifteenth

(15th) calendar day after such Retailer or TPP receives

notice thereof in accordance with such Retailer's or TPP's

agreement with the EBT Provider.

12.2. Concentration Account Security

The requirement to maintain a financial guaranty and or the

form of the financial guaranty will be reassessed by HHSC

annually. HHSC and the EBT Provider will solicit

comments and suggestions from the Texas EBT Retailer

Stakeholder Group in the course of such reassessment and

will consider in good faith comments and suggestions

received.

12.3. Confidentiality

12.3.1. Confidential Information

As used herein, "Confidential Information" shall mean any

information, in any form (e.g., written, oral, magnetic tape

or disc, etc.) directly or indirectly provided by the EBT

Provider and/or HHSC to the Retailer and/or TPP, or by the

Retailer and/or TPP to the EBT Provider and/or HHSC (the

receiving party hereinafter referred to as the "Disclosee")

pursuant to or in connection with an agreement between the

EBT Provider and Retailer, or the EBT Provider and TPP

(and/or the negotiation of such agreement), whether before

or after the date of the agreement that relates to any aspect

of the disclosing party's (the "Discloser") business,

products (hardware and software), services, equipment,

technologies, know-how, personnel, finances, sales and/or

marketing. However, the following shall not be

"Confidential Information":

1. information that is or has been generally available to

the public or comes into the public domain other than

as a result of Disclosee's breach of such agreement;

2. information already known to the Disclosee at the time

it is or was disclosed by Discloser, as documented by

records in the Disclosee's possession predating

Discloser's disclosure;

3. information subsequently received by the Disclosee in

good faith from an entity other than Discloser having



35

the prior right to make such subsequent disclosure;

4. information independently developed by the Disclosee

without use of Discloser's Confidential Information;

and,

5. information approved by Discloser in writing for

unrestricted release or unrestricted disclosure by the

Disclosee.

12.3.2. Obligations

Each Disclosee acknowledges that all Confidential

Information disclosed by or belonging to Discloser is vital

to the business of Discloser and shall remain strictly

confidential. Each Disclosee shall keep strictly confidential

and shall not (directly or indirectly, in whole or in part,

individually or in conjunction with others) disclose or

otherwise provide to anyone (other than to the Disclosee's

employees or subcontractors with a need to know for the

purposes contemplated by an agreement between Disclosee

and Discloser, provided that all such employees or

subcontractors shall be advised of their obligations to

protect Discloser's interests, which obligations shall be

identical to Disclosee's hereunder), or in any way use,

reproduce in any medium, disclose or provide any

Confidential Information unless Discloser has in its sole

discretion previously and specifically authorized such use,

reproduction, disclosure or provision in writing. Any

reproduction, in whole or in part, in any medium, of

documents or other media containing Confidential

Information made by each Disclosee shall bear all

copyright, trademark, patent and other proprietary notices

appearing on the original.

12.3.3. Permitted Disclosures

Notwithstanding anything in a Retailer agreement or TPP

agreement to the contrary, Confidential Information may be

disclosed if, in the reasonable opinion of Disclosee's legal

counsel, disclosure is required to be made by law or

government rule or regulation, or by court order; provided

however,

1. that prior to any such disclosure, Disclosee shall

provide to Discloser a written opinion of their legal

counsel supporting its conclusion that such disclosure

is necessary, and shall cooperate insofar as

commercially reasonable with Discloser regarding the

manner of such disclosure or with any action taken by

Discloser (entirely at Discloser’s own cost) to

challenge the validity of such requirement; and,

2. that such disclosure shall be made only to the extent

determined necessary in the opinion of Disclosee's

legal counsel, or by the governmental body requiring

disclosure (the latter determination to have priority).

Notwithstanding anything in these Operating Rules to the

contrary, the EBT Provider may disclose Confidential

Information of Retailer to the State and/or FNS, to the

extent the EBT Provider may be required to do so under

contract with HHSC or under State and/or FNS regulations

applicable to EBT; provided, however, that to the extent the

EBT Provider may be required to disclose any such

Confidential Information of Retailer, the EBT Provider

shall use their best efforts to present only that information

specifically requested by the State and/or FNS and to

present it in a form that protects in so far as possible the

confidentiality of Retailer's sales information.

12.3.4. No Right or Title

Each Disclosee acknowledges that all Confidential

Information of Discloser is a valuable and unique asset and

trade secret of Discloser and it has no right, title or interest

therein, other than as otherwise specifically set forth in an

agreement between Disclosee and Discloser and other than

the right to use it as necessary to effect the purposes of such

agreement(s).

12.3.5. No Disassembly of Equipment

Retailer and TPP further acknowledges that Confidential

Information might be obtained through examination of the

interior or disassembly of Equipment, and therefore each

agrees that, without the prior specific written approval of

the EBT Provider, each Retailer and TPP shall neither

permit the display of the interior of any Equipment to

others nor permit transfer of possession of any Equipment

to others.



36

12.3.6. Adequate Security

Each Disclosee shall take all reasonable measures to protect

the confidentiality of Confidential Information. Without

limiting the foregoing, each Disclosee shall employ

security measures and a degree of care regarding

Confidential Information which is at least as protective as

those employed by that Disclosee regarding its own

proprietary and Confidential Information.

12.3.7. Reasonableness

Each Disclosee acknowledges that the restrictions on the

use, reproduction and disclosure of Discloser's Confidential

Information set forth in this Section 12.3 are reasonable to

protect Discloser's business interests.

12.3.8. Survivability

This Section 12.3 shall survive the termination or

expiration of the last expiring agreement between Disclosee

and Discloser and continue in effect for ten (10) years

thereafter.

12.4. Representations and Warranties

12.4.1. By the EBT Provider

By entering into a Retailer agreement or TPP agreement,

the EBT Provider thereby represents and warrants to the

Retailer or TPP as follows:

1. it is a corporation organized, validly existing and in

good standing under the laws of the jurisdiction of its

incorporation and has the requisite corporate power and

authority to execute, deliver and perform such

agreement;

2. the execution, delivery and performance of such

agreement by it has been duly authorized by all

necessary corporate action on its part;

3. such agreement has been duly and validly executed by

it, and such agreement constitutes the valid and binding

obligation of it, enforceable against it in accordance

with its terms, subject to applicable bankruptcy,

insolvency or other similar laws relating to creditor's

rights generally, and to general principles of equity;

and

4. the execution, delivery and performance by it of such

agreement will not, with or without the giving of notice

or the lapse of time, or both, (i) violate any provision of

any law, rule or regulation to which it is subject, (ii)

violate any order, judgment or decree applicable to it,

(iii) conflict with, or result in a breach of, any provision

of its Certificate of Incorporation, Bylaws or other

similar charter document, or (iv) conflict with or result

in any violation of any provision of any contract,

agreement, lease, franchise, permit, license or other

instrument, which conflict or violation could materially

adversely affect the ability of it to perform such

agreement.

12.4.2. By Retailer or TPP

By entering into a Retailer agreement or TPP agreement,

the Retailer or TPP thereby represents and warrants to the

EBT Provider as follows:

1. it is validly existing and in good standing under the

laws of the jurisdiction of its organization, and has the

requisite power and authority to execute, deliver and

perform such agreement;

2. the execution, delivery and performance of such

agreement by it has been duly authorized by all

necessary action on its part by the governing body of

Retailer/TPP;

3. such agreement has been duly and validly executed by

it and constitutes the valid and binding obligation of it,

enforceable against it in accordance with its terms,

subject to applicable bankruptcy, insolvency or other

similar laws relating to creditor's rights generally, and

to general principles of equity; and,

4. the execution, delivery and performance by it of such

agreement will not, with or without the giving of notice

or the lapse of time, or both, (i) violate any provision of

any law, rule or regulation to which it is subject, (ii)

violate any order, judgment or decree applicable to it,

(iii) conflict with, or result in a breach of, any provision

of its Certificate of Incorporation, Bylaws or other

similar charter document, or (iv) conflict with or result

in any violation of any provision of any contract,

agreement, lease, franchise, permit, license or other

instrument, which conflict or violation could materially

adversely affect the ability of it to perform such

agreement.



37

12.5. Indemnities

In addition to the indemnities set forth elsewhere in these

Operating Rules, Retailer and TPP, respectively, shall

indemnify the EBT Provider and the HHSC for any Losses

incurred by either of them based upon or arising out of (i)

breaches of any of the representations, warranties,

covenants or agreements contained in its respective

agreement with the EBT Provider (including the

appendices thereto), or (ii) claims by any person or entity if

and to the extent such Losses to such other person or entity

resulted from the negligent acts or omissions of the Retailer

or TPP, respectively, or its directors, officers, employees or

agents. The terms of this Section 12.5 shall survive the

expiration or termination of the applicable Retailer

agreement or TPP agreement.

12.6. Limitations of Liability

Absent fraud or intentional misconduct, in no event shall

any party to a Retailer or TPP agreement be liable for

special, indirect, consequential or punitive damages of any

kind or nature whether alleged to be attributed (i) to a

breach of such agreement, (ii) to tort or negligence or (iii)

to some other cause.

12.7. Force Majeure

12.7.1. Suspension

In the event that any party to a Retailer agreement or TPP

agreement shall be rendered unable to carry out the whole

or any part of its obligations under such agreement by

reason of an Event of Force Majeure, such party shall

immediately give notice to the other, such notice to contain

details of the circumstances giving rise to the Event of

Force Majeure. During the Event of Force Majeure, the

operation of the agreement, only in so far as is necessary,

shall be suspended without liability for damage, it being

understood that the causes of such interruption shall be

remedied with all immediate dispatch and performance

resumed at the earliest possible time by the party declaring

an Event of Force Majeure.

12.7.2. Right to Terminate

If a party's inability to fulfill its obligations under a Retailer

agreement or a TPP agreement due to an Event of Force

Majeure shall continue for more than six (6) weeks, then a

party not suffering from such inability shall be entitled

(after due consultation with the other party) to terminate

such agreement in its entirety, at the discretion and/or

direction of FNS.

12.8. Entire Agreement

A Retailer agreement or TPP agreement, including all

Appendices hereto and the Operating Rules (and, as to the

TPP agreement, the Interface Specifications), represents the

entire agreement and understanding of the parties with

respect to the subject matter of such agreement, and

supersedes and cancels in all respects all prior agreements,

understandings, representations, undertakings and prior

negotiations of the parties with respect to the subject matter

of such agreement, whether such be written or oral.

No other terms or conditions (including any written on or

attached to any form, document or correspondence) shall be

included or implied unless agreed upon in writing signed

by an authorized officer or representative of each of the

parties to such agreement.

12.9. Amendments

Except with respect to the Operating Rules (which may be

amended as set forth herein), a Retailer agreement or TPP

agreement shall not be amended except by a writing of

subsequent date thereto, executed by duly authorized

representatives of the parties thereto.

12.10. Assignment and Subcontracting

12.10.1. By Retailer or TPP

A Retailer agreement or TPP agreement, or any interest in

either, may not be assigned or sub-contracted by Retailer

without the prior written consent of the EBT Provider and

notification to USDA FNS. The EBT Provider shall

respond to Retailer requests for consent within thirty

calendar days of receipt. The following shall be considered

assignments for purposes of either of such agreements: (i) a

transaction involving the sale, pledge, or other transfer of

fifty percent (50%) or more of the Retailer's/TPP's stock or

other ownership interest constituting an interest in the

control of Retailer/TPP; (ii) a merger of Retailer/TPP into

another entity; (iii) a sale or other transfer of all or a

substantial part of Retailer's/TPP's business; (iv) if

Retailer/TPP is a partnership or joint venture of any form, a

sale or transfer of ownership therein or assets thereof or any

other transaction, which sale, transfer or other transaction

has the effect of dissolving the partnership or joint venture

and/or creating a new one, regardless whether the owners



38

and their respective ownership interests are the same as

before; (v) if Retailer/TPP is a corporation, any

reorganization that results (by its own terms, or by

operation of law) in a different legal entity being

responsible for Retailer's/TPP's obligations.

12.10.2. By the EBT Provider

A Retailer agreement or TPP agreement, or any interest in

either, may not be assigned by the EBT Provider without

the prior written consent of both the Retailer/TPP and

HHSC, provided however, that: (i) the EBT Provider may

assign any such agreement to any person, firm or other

entity which may become a successor in interest to the EBT

Provider by purchase, merger or otherwise, or which

acquires all or substantially all of the assets of the EBT

Provider; and/or (ii) the EBT Provider may assign any such

agreement or subcontract any of its obligations under any

such agreement to any person, firm or other entity in which

the EBT Provider owns a majority of the ownership

interest, or which owns a majority of the ownership interest

in the EBT Provider; and/or (iii) the EBT Provider may

subcontract any of its obligations hereunder to any person,

firm or other entity, provided that the EBT Provider retains

primary responsibility for the performance of the

obligations subcontracted to such subcontractor.

12.11. Waiver

The failure of any party to enforce at any time any of the

provisions of a Retailer agreement or TPP agreement shall

in no way be construed to be a waiver of such provisions,

nor in any way affect the validity of such agreement or any

part thereof, or the right of that party thereafter to enforce

each and every provision.

12.12. Severability

The parties to each Retailer agreement and TPP agreement

acknowledge that the provisions contained therein

(including without limitation any relating to Confidential

Information) are required for the reasonable protection of

the business interests of such parties. If any provision

contained in any such agreement shall for any reason be

held invalid, illegal or unenforceable in any respect, then

such provision shall not apply where such invalidation,

illegality or unenforceability applies, and such invalidation,

illegality or unenforceability shall not affect other

provisions hereof which can be given effect without the

affected provisions, and to this end the provisions hereof

are declared to be severable. If any provision contained in

any such agreement shall for any reason be held to be

unlawful or unenforceable because it is excessively broad

as to duration, scope, activity or subject, it shall be

construed, by limiting or reducing it, so as to be

enforceable to the extent compatible with the applicable

law as it shall then appear, in accordance with the original

intent of the parties as herein expressed.

12.13. Relationship of the Parties

The parties to each Retailer agreement and to each TPP

agreement are independent contractors. Nothing contained

in any such agreement shall be construed so as to create the

relationship of employer and employee, partnership,

principal and agent, or joint venture company between the

parties. No party to any such agreement shall have any

authority to bind the other party as an agent or in any other

capacity for any purpose, nor shall any party directly or

indirectly represent to any person that it has such authority.

12.14. Successors; Third-Party Beneficiaries

Each Retailer agreement and each TPP agreement shall be

binding upon and endure for the benefit of the successors in

title or the permitted assigns of either of the parties to such

agreement. No such agreement shall be construed as giving

any person or entity, other than the parties thereto and their

permitted successors and assigns, any legal or equitable

right, remedy or claim under or in respect of such

agreement, such agreement being for the sole and exclusive

benefit of said parties and their permitted successors and

assigns, provided however, that the HHSC shall be deemed

a third-party beneficiary of each such agreement with

respect to the representations, warranties, covenants and

agreements made by Retailer/TPP therein.

12.15. Choice of Law

Each Retailer agreement and TPP agreement (including

these Operating Rules), the rights, duties, and obligation of

the parties thereunder, shall be construed in accordance

with and governed by the laws of the State of Texas

applicable to agreements made and to be performed wholly

within such jurisdiction.

12.16. Notices

12.16.1. Method of Notification

All notices, requests and other communications required or

permitted to be given under the Retailer or TPP



39

Agreements shall be in writing and shall be (i) delivered in

person, obtaining a signed receipt; or (ii) sent by private

express delivery service, obtaining a signed receipt, or (iii)

transmitted by fax, with confirmation of satisfactory

sending. If to the Retailer or TPP, such notices, requests

and other communications shall be sent to the address or

fax number set forth in the executed TPP Agreement. If to

the EBT Retailer, such notices, requests and other

communications shall be sent to the address or fax number

set forth in the executed Retailer Agreement. If to Fidelity

Information Services, LLC (FIS) such notices, requests and

other communications shall be sent to:

FIS EBT Merchant Services

P.O. Box 290

Milwaukee, WI 53201

Fax: 414-341-7085

12.16.2. Confirmation of Notice Delivery

Notices delivered in person shall be deemed given when

delivered, notices sent by private express delivery service

shall be deemed given the next Banking Business Day after

sending, and notices sent by fax shall be deemed given on

the date transmitted if a Banking Business Day (and if not,

on the first Banking Business Day thereafter).

12.16.3. Change of Address or Fax Number

Any party may at any time give notice in writing to the

other party of a change of address or fax number of the

party giving the notice and, effective ten (10) business days

after such notice is given, the address or fax number therein

specified shall be deemed to be the new address or fax

number of the party for purposes hereof.

12.17. Arbitration

The parties to each Retailer agreement and TPP agreement

shall use their best efforts to solve by mutual agreement

and disputes, controversies, or claims which may arise

between them. Disputes, controversies, or claims that

cannot be so resolved, other than those involving disputed

Texas EBT Network Transactions (which shall be resolved

in accordance with Section 9) and other than those which

are grounds for a complaint (which shall be resolved in

accordance with Section 13.2), shall be settled by final and

binding arbitration before a single arbitrator of the Austin,

Texas, Judicial Arbitration and Mediation Services, in

accordance with its arbitration rules; provided, however,

that disputes, controversies, and claims which involve the

State or United States government, or any agency of either,

and/or are subject to a resolution procedure provided in

State or Federal law or regulations, shall not be subject to

the arbitration procedure contemplated in this Section

12.17. Judgment upon any award rendered by the arbitrator

in any such arbitration may be entered in any court having

jurisdiction thereof.


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13. Network Administrative

Procedures

13.1. Variance Procedures

13.1.1. Requests for Variances

Any TPP may request a variance so that it is permitted not

to comply with a provision of these Operating Rules.

Requests for variances should be submitted to the EBT

Provider in writing, together with a statement of the reasons

for the request and any supporting evidence.

13.1.2. Action by the EBT Provider

The EBT Provider shall consider each request for a

variance that is referred to it and shall make a

recommendation to HHSC as to whether the request should

be granted or denied.

13.1.3. Action by HHSC

HHSC shall consider each recommendation by the EBT

Provider on a variance request and may, at its discretion,

grant or deny a request for a variance. Each variance

granted by HHSC shall be subject to modification by

HHSC at any time and from time to time.

13.1.4. Variance Policy

If a variance is requested for a change in these Operating

Rules which would constitute a generalized operating

procedure for other Retailers or TPPs, the variance request

will normally be denied, and an amendment proposed to

these Operating Rules. Variances will be considered only

in cases where special circumstances make an exemption

appropriate for the Retailer or TPP.

13.2. Grievance Resolution

13.2.1. Complaints

Any interested party subject to these Operating Rules,

including a Retailer, TPP, the EBT Provider or HHSC, may

initiate a complaint. Grounds for a complaint include, but

are not limited to the following:

1. a TPP or Retailer or EBT Provider has violated the

Operating Rules;

2. the application of the Operating Rules resulted in

prejudicial and materially unequal treatment of the

complainant; or

3. any TPP or Retailer has been or is prejudicially and

materially discriminated against with respect to its use

of EBT Provider’s services.

Complaints are initiated by submission to the EBT

Provider. Complaints may be initiated orally or in writing,

but if initiated orally, a written version of the complaint

must be submitted to the EBT Provider within three (3)

Banking Business Days after oral submission. Complaints

must include the full name, address and telephone numbers

of all initiators and all respondents, a detailed description of

each matter complained of, the relief sought and grounds

for such relief. A copy of the written complaint shall be

sent to each Respondent at the same time and in the same

manner as the original complaint sent to the EBT Provider.

13.2.2. Investigation

1. Upon receipt of a written complaint, the EBT Provider

shall immediately investigate the matter.

2. All Retailers and TPPs shall fully cooperate with any

investigation by the EBT Provider and shall make

available any relevant records, except that Retailers and

TPPs may choose to withhold those records which are

legally privileged or where the furnishing of such

records would violate any applicable federal, state, or

local laws or regulations.

3. Upon completion of the investigation, the EBT

Provider will notify all affected parties of the

investigation results and decision.

13.2.3. Authority of the EBT Provider

The EBT Provider shall have the authority to make a

determination as to the resolution of any complaints

submitted in accordance with this Section 13.2, to order

Settlement adjustments among Retailers and TPPs and, in

consultation with HHSC and FNS, to suspend or terminate

TPPs or Retailers for cause.

13.2.4. Informal Review by HHSC

Any affected TPPs or Retailers that are dissatisfied with

resolution of a complaint by the EBT Provider may request

that the complaint be determined anew by HHSC. A


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41

written request for such determination must be filed with

HHSC so HHSC receives it within 15 Calendar days after

the Retailer or TPP receives the official notice of action

from the EBT Provider. The request must be addressed to

HHSC; ATTENTION: Lone Star Business Services, (Mail

Code 2033); PO Box 13247; Austin, Texas 78711.

Upon receipt of the request by HHSC, the HHSC EBT

Program Operations Manager will resolve the complaint in

an informal review procedure governed by its informal

review processes and procedures.

13.2.5. Records

The EBT Provider shall maintain records of all complaints

and subsequent resolutions for three years or such longer

period of time as applicable federal or state law may

require. Such records shall be made available for

inspection by any affected Retailer or TPP upon reasonable

notice to the EBT Provider during the EBT Provider’s

normal business hours.

13.3. Procedures for Terminated Retailers and TPPs

13.3.1. Termination of Use of Lone Star Mark

Upon the termination (either voluntary or involuntary) of

its participation in the Texas EBT Program, the terminated

Retailer or TPP shall take all necessary action to cease all

use of the Lone Star Mark. If any action required of a

terminated Retailer or TPP by this Section 13.3 is not

promptly taken by the Retailer or TPP, the EBT Provider,

on not less than three business days of prior written notice

to the TPP, may take such action itself at the expense of the

terminated Retailer or TPP.

13.3.2. Use of Texas EBT System

A terminated Retailer or TPP shall have no right to submit

transactions to the Texas EBT System after the date of

termination of its participation in the Texas EBT Program

except as provided below in Sections 13.3.3 and 13.3.4.

13.3.3. Continued Liability for Disputed Transactions

A terminated Retailer or TPP shall continue to be liable for

Chargebacks and disputed Transactions pursuant to these

Operating Rules.

13.3.4. Other Rights and Liabilities

Subject to the conditions and limitations, including

limitations of time, stated in applicable Operating Rules, a

terminated Retailer or TPP may continue to assert any

rights accorded it by these Rules, and shall remain subject

to the rights against a Retailer or TPP accorded to any other

Retailer or TPP with respect to any matter occurring prior

to the termination of its participation.


Interoperability Page Version 7.0 May 2017

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14. Interoperability

Interoperability is the free movement of SNAP benefits

across state lines. To accept EBT cards from other states

requires the Retailer to have an agreement with its TPP.

TPPs must load and manage EBT Card Issuer Identification

Numbers (IINs) from all States, District of Columbia,

Guam, and the U.S. Virgin Islands.


43

15. Glossary of Terms and Definitions

Capitalized terms used in these Operating Rules shall have the meanings ascribed to them in this Section.

ACF

The Administration for Children and Families. The part of the United States Department of Health and Human Services which administers the

Temporary Assistance to Needy Families (TANF) program.

ACH

Automated Clearing House Network. The ACH network is operated by the Federal Reserve and financial institutions to electronically process funds

transfers between financial institutions.

Acquiring Institution Code/Processor Identification Number

A number determined by the EBT Provider that identifies the TPP. Retailers use and must know this number when processing certain Transactions

(i.e., Manual Vouchers).

Adjustment

A financial Transaction that corrects the amount of a previous financial Transaction and results in a debit or credit to the Client's account.

Adjustments are manually initiated to correct a problem and are subject to audit and special controls. (See also Reversal.)

Advice

Message that notifies a party of an action that has already been taken and that requires no approval, but requires acknowledgment of receipt. An

Advice may be declined if the Transaction data does not match the corresponding Voucher Authorization.

ANSI

American National Standards Institute. United States standards group responsible for issuing United States standards and maintaining consistency

with similar international standards.

Balance Inquiry

A non-financial transaction that permits the Client to learn its available balance in its EBT Program Benefit account(s). (Balance Inquiries are

permitted.)

Banking Business Day

A calendar day (i.e., beginning at 12:00 midnight and ending the following 12:00 midnight) other than a calendar day that is a Saturday, Sunday or

day on which banks and financial institutions are closed.

Cardholder

An individual who has been issued or authorized to use a Card to affect EBT Program Transactions.


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Certification Testing

The detailed set of procedures followed by the EBT Provider and a TPP which produces a determination concerning the TPP fitness to participate in

the Texas EBT Program and interface with the Texas EBT System.

CFR

United States Code of Federal Regulations.

Client

A household member and/or their authorized representative eligible to receive EBT Program Benefits and to perform transactions using a Lone Star

Card.

EBT

Electronic Benefit Transfer. The delivery of government benefits through electronic means and media.

EBT Call Center

The facility operated by the EBT Call Center Provider to provide 24 hour, 7 day telephone assistance to Texas EBT Clients.

EBT Program Benefits

SNAP benefits and TANF Program benefits. Other government benefits may be distributed or conducted via the Texas EBT Network in the future.

EBT Program Transactions

Transactions involving the authorization, issuance, redemption, accounting, settlement and/or reconciliation of, and/or query with respect to EBT

Program Benefit accounts. Balance inquiries shall be permitted via POS Terminals.

EBT Provider

Vendor contracted by the HHSC to operate in the role as Retailer Management Services, EBT Call Center Services, , and Central Processor for the

Texas EBT system as well as the computer and telecommunication systems that perform authorization, Settlement, and other services related to


EBT Provider’s Merchant Help Desk

The facility operated by the EBT Call Center Provider to provide 24 hour, 7 day telephone assistance to Retailers related to Texas EBT Network

Transactions and Program Benefits and to retailers related to Manual Voucher processing.

EBT System Cut-Off Time

Time at which all Transaction activity is captured for Settlement. All TPP and Retailer Cut-Off after the last EBT System Cut-Off and prior to the

current EBT System Cut-Off will be Settled for next day funds availability. (See Section 8.2.)


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Electronic Voucher

A method to electronically transmit Voucher Authorization Transaction information from a Retailer terminal or a TPP host link to the Texas EBT

System.

Entertainment

The sale of alcoholic beverages, legalized games of chance, sexually oriented materials, coin-operated amusement machines or amusement services.

Equipment

State-supplied Hardware or Equipment, the use of which will be provided by the EBT Provider to the Retailer pursuant to the terms and conditions of

a Retailer agreement.

Event of Force Majeure

An Event of Force Majeure is any of the following:

Act of God, defined as unusual, extraordinary or overwhelming natural phenomena, such as fire, earthquake, lightning, flood, which produces

severe losses of properties or lives resulting in severe stoppages of production or assembly capability;

War, civil commotion, acts of public enemies, revolution resulting in severe damages of properties and lives;

Government act or omission, including but not limited to the enactment of laws, the approval of rules or regulations, executive orders;

Freight embargoes, general blockades, strikes, lock-outs, slow down, sabotages at the plants or railway or port of loading or discharge including

breakdown of plant and machinery causing severe stoppages of production or assembly; and/or epidemic causing severe losses of lives and/or

any other events which no human precaution could have foreseen or averted.

FIS Application and Agreement For Benefits Redemption

The written agreement executed between the EBT Provider (FIS) and exempt retailers electing to operate POS Terminals supplied by the EBT

Provider on behalf of HHSC, and between the EBT Provider and non-exempt retailers.

FNS

Food and Nutrition Service of the United States Department of Agriculture, the federal program agency responsible for SNAP and other types of

benefits.

Graphics Standards

The standards which apply to the use of the Lone Star Mark, logo, and signage by Retailers and TPPs. Included are rules regarding size, placement,

color, background and copy.

HHSC

The Texas Health and Human Services Commission.


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Initiator

The party initiating the process to resolve a dispute with a Respondent.

ISO 8583

International Standards Organization (ISO) standard for retail financial Transactions. Adopted and modified by the American National Standards

Institute (ANSI) X9.2-1988.

LSBS

Lone Star Business Services manages and supports the Electronic Benefit Transfer (EBT) system for SNAP food benefits and Temporary Assistance

for Needy Families (TANF) programs.

Losses

Collectively, liabilities, losses, damages, claims, judgments, fines, penalties, amounts paid in Settlement, costs and expenses (including the

reasonable fees of counsel, consultants and other experts).

Texas EBT-Retailers Stakeholders Group

"Stakeholders Group" shall refer to the Texas EBT-Retailers Stakeholders Group.

Magnetic Stripe Card

Benefit access card that contains encoded information on a magnetic stripe. The stripe may contain three information tracks. Track II is most often

used for payments and benefits.

Manual Voucher

A paper document used to record customer information, Transaction data and the customer's signature.

Manual Voucher Transaction

A Texas EBT Network Transaction effected manually (i.e., not via a POS Terminal), and including a Manual Voucher Authorization number.

Merchant Help Desk

The facility operated by the EBT Provider to provide 24-hour, 7-day telephone assistance to Retailers and TPPs related to Texas EBT Network

Transactions and/or POS Terminals.

Operating Rules

This document.


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PAN

Primary Account Number. Client's EBT number embossed and encoded on the Lone Star Card.

PIN

Personal Identification Number issued to or selected by the Client.

POS Terminal

A device located at a Retailer point-of-sale that is capable of processing debit and/or credit Transactions and includes a magnetic stripe reader, a

communication modem, a number pad (and sometimes also a PIN pad or barcode reader), whether or not such device is also used in connection with

other purposes.

Pre-notification

A zero dollar amount entry sent through the ACH network to verify settlement account information for a TPP or Retailer.

Processing Time

Typically, the amount of time required to process a Texas EBT Network Transaction. In an online system, processing time includes several

components: 1) time required to transmit messages over the telecommunications network; 2) time that messages spend in the system processing

queue, and 3) time to actually process the message in the central computer.

Processor Interface Specifications

The document provided by the EBT Provider to TPPs which details the methods, techniques, and standards which must be observed by TPPs within

the Texas EBT Program in order to effect EBT and interface with the Texas EBT System.

Re-Installation Fee

A one-time fee charged by the EBT Provider as a reimbursement for the expense of restoring Equipment and service to a Retailer site, after it has

been de-installed, calculated on a "time and material" basis.

Respondent

The second party to the dispute identified by the Initiator.

Retailer

An entity currently authorized by the Food and Nutrition Services (FNS) to participate in the SNAP food program, or a non-food (non-FNS-

authorized) entity that redeems TANF cash benefits (either cash or in exchange for goods and/or services). To be a non-food retailer, no more than

ten percent (10%) of the retailer’s gross revenue may be derived from entertainment.

Retailer Cut-Off Time

Each TPP will establish the daily time at which their Business Banking Day ends for purposes of EBT Program Transactions (See Section 8.3.).


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Retailer Identification Number

A fifteen- (15) digit (alpha/numeric) identifier that is sent in electronic messages that identifies the specific store processing the Transaction.

Retailer Participation Agreement

The written agreement executed between the State-supported POS Terminal Services Provider and an exempt Retailer electing to operate POS

Terminals supplied by the State-supported POS Terminal Services Provider on behalf of HHSC; or the written agreement executed between a TPP

and a Retailer. All Retailers that redeem Texas EBT benefits must first execute a Retailer Participation Agreement.

Retailer TPP

A Retailer who acts as its own TPP and who does not use the services of a commercial TPP for the purposes of processing Texas EBT Network

Transactions.

Retrieval Request

Request by the EBT Provider to the Retailer and TPP to provide proof that an EBT Program Transaction has occurred.

Reversal

A “Reversal” is a type of Transaction that is initiated by a POS in the Texas EBT System to correct a variety of system communication issues. A

Reversal may be initiated by a POS device to “cancel” the most recent Transaction from the device. This would typically be necessary when no

authorization to complete a Transaction was received by the POS terminal from the EBT system within a predetermined period of time (usually

around 30 seconds). A Reversal Transaction must include enough information to allow it to be unambiguously matched with the Transaction that is

being reversed. (See also Adjustment.)

Settlement

Process by which funds are transferred between a participating Retailer or TPP and the EBT Provider as a result of Texas EBT Network Transaction

activity.

Settlement Account

Account maintained by a Retailer or a TPP for the purposes of settlement.

Software

Software operating on and/or in connection with the Equipment.

State

The State of Texas, including but not limited to the HHSC and other agencies and departments of the State of Texas, and the executive, legislative

and judicial branches of the State of Texas government.

Store-and-Forward

An alternative to Manual Voucher Transactions.


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SNAP Effective October 1, 2008, Supplemental Nutrition Assistance Program (SNAP) is the new name for the federal Food Stamp Program.

SNAP Benefits An electronic medium of exchange which enables eligible households to acquire food products approved by FNS as government benefits in

accordance with applicable FNS policies and regulations. The current benefit schedule is available at

http://www.hhsc.state.tx.us/providers/LoneStar/EBT/EBThowto.html#When_are_Food_Stamp_benefits_available.

Stand-In Processing

A complete description of Stand-In Processing can be found in Section 2.11.

System Availability

Percentage of time a system is able to process Transactions measured on either a full time (24 hours, 7 days a week) or scheduled time basis.

TANF

Temporary Assistance to Needy Families. A recipient of TANF benefits must use the money to purchase goods and services necessary and essential

to the welfare of the children, such as food, clothing, housing, furniture, transportation, laundry, medical supplies, household supplies, and recreation.

(TAC RULE §372.1509

TANF Cash Program Benefits

TANF Cash Program benefits are benefits that are used to purchase goods and services necessary and essential to the welfare of the children, such as

food, clothing, housing, furniture, transportation, laundry, medical supplies, household supplies, and recreation (see the Texas Administrative Code,

Title 1, Part 15, Chapter 372, Subchapter F, Division 1, RULE §372.1509, (b) Ineligible products are goods and services that are not necessary and

essential to the welfare of the children, such as alcoholic beverages, tobacco products, lottery tickets, adult entertainment, firearms, ammunition,

bingo, illegal substances, etc.

Texas EBT Network

The combination of the Texas EBT System, the POS Terminals, the participating TPPs and all communication links and devices.

Texas EBT Network Transactions

EBT Program Transactions and such other electronic funds transfer (EFT) transactions (commercial or involving governmental benefits).

Texas EBT Program

The implementation and operation with respect to an online EBT system for the electronic issuance and redemption of EBT Program Benefits.

Texas EBT System

A part of the Texas EBT Network, the computer and telecommunication systems that perform authorization, Settlement, and other services related to

http://www.hhsc.state.tx.us/providers/LoneStar/EBT/EBThowto.html#When_are_Food_Stamp_benefits_available


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Third-Party Processor (TPP)

An entity, that, through means of a computer system that directly or indirectly interfaces with the Texas EBT System, transmits (directly or

indirectly) Texas EBT Network Transaction requests from and responses to POS Terminals owned or controlled by one or more Retailers, and

performs Settlement services with respect to such POS Terminals (i.e., at the POS Terminal level) for the Retailers owning or controlling such POS

Terminals.

Third-party Processor (TPP) Agreement

A written agreement executed between the EBT Provider and a TPP.

Transaction

A Texas EBT Network Transaction.

Triple DES

Triple Data Encryption Standard. An encryption/decryption algorithm published by ANSI as Standard X3.92-1981. Used to encrypt PIN data in

EBT and EFT Transactions for secure transmission. DES is classified as a non-linear, interactive block product cipher.

USC

United States Code.

USDA

United States Department of Agriculture.

USDHHS

United States Department of Health and Human Services.

Voucher Authorization

The process of a Retailer requesting via the EBT Provider Merchant Help Desk that the EBT Provider authorize the Retailer to execute a Manual

Voucher Transaction and receiving an affirmative response thereto; or the EBT Provider’s affirmative response itself.

Operating Rules - Texas Health and Human ServicesTANF Cash Withdrawal Fees 32 10.3.3. Reimbursement...

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Transcript of Operating Rules - Texas Health and Human ServicesTANF Cash Withdrawal Fees 32 10.3.3. Reimbursement...